Cable operators are not generally inclined to offer television service to customers without getting some form of payment in return. In the US this is generally understood to be “pay-TV”, but in parts of Europe the situation is distinctly more complicated. Because of the labyrinthine structural complexities of the German cable and television industries, for example, many German households which use even basic cable TV service do not directly pay for this. Instead the fees are covered by intermediaries such as housing associations and hidden from end customers.
The scale of this issue is illustrated in our latest ConsumerMetrix analysis. Nearly two-thirds of TV customers of major German cable providers like Kabel Deutschland and Unity Media believe they are not paying for this service. The same situation exists in France, to a lesser degree, and even in the UK, where 13% of Virgin Media customers say they are not paying for the TV service. Here the confusion is more likely a result of bundling deals where basic TV services are thrown in with a broadband and telephone package. All of this makes it challenging to assess exactly what is and isn’t pay TV, and it should serve as a warning to US cable firms looking to expand in the European market.
