Previously, tenants had to pay cable fees if their landlord wanted them to – even if linear television was not used at all. That will change from July. What does this mean for cable customers?
In six months at the latest, millions of tenants will have to make new agreements in order to continue to be able to watch television in their apartments. On July 1st, a legal deadline expires after which landlords are no longer allowed to pass on TV fees to additional costs. This affects around twelve million tenants who have benefited for years from the “auxiliary cost privilege” introduced in the 1980s, which is now ending. This benefited the cable network operators Vodafone and Tele Columbus. An alternative to cable television is transmission over the Internet.
The top dogs in particular are likely to be prepared for customer losses because some of the tenants want to get out of the previous mandatory payment. Every tenant whose landlord wanted this had to pay the cable fees – even if the tenant no longer uses linear television. Some tenants paid twice – for the unused cable connection and for another transmission route that offered more options. However, many may have shied away from such a double payment. If the mandatory payment for cable is no longer required, demand for competing offers is likely to increase.
Providers are threatened with losses and it will be more expensive for customers
In an investor presentation, Vodafone addresses the consequences of the change in the law and mentions an annual sales figure of around 800 million euros. The “Frankfurter Allgemeine Zeitung” had previously reported on this. This figure refers to 8.5 million TV customers who come through housing associations. According to its own information, Vodafone has a total of 13 million cable customers – the majority of which now has to be re-regulated contractually. Tele Columbus says there are “certain business risks.”
The companies are now offering new contracts and agreements that allow tenants to continue to benefit from relatively favorable conditions outside of additional costs. For this purpose, the cable providers have entered into collaborations with housing associations. This was an advantage of the previous apportionment: Because the landlords concluded large contracts with the cable providers with many users, the average price per apartment was low – at Vodafone, according to the company, it was currently seven to nine euros.
In the future it should be eight to ten euros – assuming one of these new agreements is used that includes a certain number of buyers. However, if there is no framework agreement and the tenant is on his own as an individual customer, he will have to shell out just under 13 euros a month from Vodafone in the future.
Competitors see opportunity
In the fight for customers, Vodafone also relies on the power of habit. “Market research shows that many tenants are more like “television purists” for whom their usual programs are more important than streaming services or internet television,” says Albers. “Nobody wants to change cables, install additional devices, use a second remote control or rearrange programs. With TV reception via cable, everything stays as it is.”
At Telekom we see things differently: the manager in charge, Arnim Butzen, points to the changing habits of many people. “Unlike cable TV, Magenta TV customers are not tied to one place like the living room,” he says. “They watch TV whenever and wherever they want: at home on their TV, on the train on their smartphone or on their balcony with their tablet.”
The competitors are hoping for as large a share of the market as possible, which is currently firmly in the hands of Vodafone & Co. “According to our assessment, cable providers could lose up to two thirds of their TV households,” says Telekom man Butzen. “The abolition of the additional cost privilege is a great opportunity for our TV offering, we can only win.” A significant increase in customers is expected. Vodafone, on the other hand, points to a self-commissioned survey that shows that most cable customers actually don’t want any changes.
From cable to satellite
Frank Lilie from the satellite TV provider Astra considers many market forecasts to be speculative. “But one thing is clear: There will be a movement away from cable – and TV reception via satellite will benefit from this.” Television access via a satellite dish on the balcony or on the roof is an alternative to cable television. There is also antenna television and the aforementioned online services.
Anyone who has an internet connection can, for example, get access to a variety of television channels and streaming services via Waipu.tv. According to company information, Waipu already has 1.3 million paying subscription customers and the number is rising. Competitor Zattoo also claims to be on the up and up. According to Zattoo, they see “enormous opportunities” in the expiry of the legal deadline and assume that they will be able to “convince a significant proportion of the existing cable customers who are willing to switch to our offer”. Almost every fifth household now receives television via the Internet. The number has doubled in the past five years.
What happens if you don’t do anything?
The cable provider Tele Columbus with its PΫUR brand is relaxed. “We assume that customers have already made their decision about the distribution method,” says press spokesman Sebastian Artymiak. According to him, customer losses have so far been limited: “The proportion of so-called cable cutters is still small.” The law that sealed the departure from the additional cost privilege came into force in December 2021, including the transition period until mid-2024.
And what happens if nothing happens by July 1st – if the deadline has passed and there has not yet been a new contractual regulation or a switch to another transmission method? The shutdowns certainly “didn’t happen all at once,” says Artymiak. “But it is true that cable connections without a contract will ultimately be shut down.”