Viacom, Inc., the nemesis of any cable operator trying to keep programming costs down, has finally bowed to the reality there is a ceiling on the number of networks Americans are willing to pay for and will narrow its focus on just six of its top cable networks.

The programmer operates more than two dozen cable networks, many forcibly bundled onto cable systems with the networks most cable operators want to carry as a result of contract renewal negotiations. As a result, many cable lineups are loaded with spinoff networks created by Viacom around their BET, Nickelodeon, and MTV brands.

In recent years, some smaller cable operators have parted company with Viacom for good, dropping networks like Comedy Central, Spike, and Nickelodeon because programming costs got too high. Cable One, Suddenlink, and most recently streaming service PlayStation Vue have dropped Viacom networks, and Altice is threatening to do the same for its Cablevision subscribers if renewal rates get out of hand. Viacom also created consternation for satellite TV providers with regular skirmishes that have led to blackouts.

New Viacom chief executive Bob Bakish now plans to cut tension with pay television operators by narrowing Viacom’s focus to just six core networks: Nickelodeon, Nick Jr., MTV, Comedy Central, BET and Spike. The Wall Street Journal reports the plan won Viacom board approval and will be publicly announced later this week.

Viacom won’t sign off the rest of its networks immediately, but will begin to shift popular programming away from weaker networks like CMT and TV Land.

“We must do everything we can to keep [our brands] strong and distinct as audiences fragment and content options proliferate,” Mr. Bakish told shareholders at the company’s annual meeting on Monday.

Viacom’s ratings are down among core audiences across all of their networks except Nickelodeon’s Nick at Night evening block and Nick Jr.

The rearrangement may not result in a lot of savings for cable operators or consumers, however, because Viacom reportedly intends to raise carriage fees for its core networks that most people want to watch. It does seems unlikely most of the non-core networks will stay on linear TV for very long under the new business plan. Most could be distributed through streaming video services or on-demand.

Viacom also intends to review its digital distribution deals with streaming providers like Hulu, and observers believe those deals are likely to see new restrictions designed to win approval from Viacom’s cable partners and help build ratings.

Among the channels no longer part of the core lineup that could eventually sign-off for good:

• CMT and CMT Music
• Logo TV
• MTV2, MTV Classic, MTV Live, MTVU, MTV Tres
• TV Land
• VH1
• Nick2, Nick at Nite, NickMusic, Nicktoons, TeenNick
• BET Gospel, BET Hip-Hop, BET International, BET Jams, BET Soul
• Centric

Former AT&T customers who dumped their former carrier for T-Mobile in return for a free year of DirecTV Now are getting a sweeter deal with a free year of Hulu with Limited Commercials as well.

T-Mobile CEO John Legere had avoided criticism of the streaming television service from AT&T-owned DirecTV until customers began complaining it has never worked as advertised, making the T-Mobile’s promotion a “meh” experience.

Legere has been a frequent critic of AT&T in social media, so it isn’t too surprising Legere started taking shots at AT&T’s streaming effort as well this morning.

On Twitter, Legere slammed DirecTV Now and called AT&T executives “delusional” over claims the service exceeded their expectations.

Just last week Randall said #DirecTVNow has been “over the top, very strong”. Uhm, what world do you live in?! #crazytown pic.twitter.com/yWrT4ds2gJ

— John Legere (@JohnLegere) January 25, 2017

“To make things right for those new T-Mobile customers, the Un-carrier is giving everyone who participated in this deal a free year of Hulu — an awesome streaming service that actually works — on top of their free year of DirecTV Now,” said the company in a statement.

Customers need not surrender their existing DirecTV Now service. Hulu’s limited commercials plan comes along for the ride for one year. T-Mobile will send affected customers a promotional code they can use to sign up over the next several weeks.

No word on if customers can also upgrade to the $11.99 no-commercial plan and receive a partial credit.

“Of course you know this means war.”

Altice USA has found a way to use CBS’ All Access online streaming service against a Connecticut CBS affiliate that blacked out its signal for some Connecticut Cablevision customers.

Meredith-owned CBS affiliate WFSB-TV in Hartford has been off the Optimum television lineup in two dozen Connecticut towns as of 5pm Friday, Jan. 13 after negotiations between Iowa-based Meredith and Altice USA broke down over the price of renewing a retransmission consent contract that Altice claims is 800% more expensive than before.

That means Optimum customers in Litchfield County no longer have access to CBS programming. Or do they? Optimum’s website is redirecting affected customers to WFSB’s network — CBS — and offering a week’s free trial of CBS’ All Access, which allows viewers online access to all CBS programming on demand.

Optimum’s previously negotiated distribution deal with CBS for the All Access platform has been in place since the summer of 2015, which means CBS cannot pull the offer down from Altice’s website. That effectively means CBS is being used to undercut its own affiliate’s most important leverage — taking away popular programming until a provider finally capitulates and signs a renewal contract.

Matt Polka, president of the American Cable Association, which represents small and independent cable companies, loves it.

“Local broadcasters cannibalized by their own network!” Polka tweeted.

Oh…The #Irony — Local #broadcasters cannibalized by their own network! Gotta love the #Internet and the #ISP that provides it! https://t.co/RABX3BHh4R

— Matthew M. Polka (@MATTatACA) January 16, 2017

Altice USA has promised investors it will hold the line on programming costs even if it means finding alternatives for customers. This seems to be an example at work.

Will CBS All Access weaken Meredith’s position on WFSB to force price concessions? The New Haven Register isn’t sure, reporting there are years of “bad blood” between Cablevision and Meredith over carriage contracts:

During the last retransmission agreement negotiations in 2014, Cablevision Systems called on the Federal Communications Commission to investigate whether Meredith Corp. was meeting public interest obligations that are an important component of all television station licenses. Cablevision also sued Meredith in Connecticut’s court system under the Unfair Trade Practices Act.

The latest dispute has attracted the attention of both of Connecticut’s U.S. senators.

“I typically don’t get involved because it’s not for me to dictate the terms of a dispute between a cable company and a network,” Sen. Chris Murphy said in a statement issued Friday night. “But I haven’t been pleased with Altice’s commitment to Connecticut since it bought Cablevision.”

FierceCable reported the area’s congressional delegation isn’t happy with either company:

Connecticut’s two Democratic U.S. Senators, Richard Blumenthal and Christopher Murphy, sent a letter addressed to both Meredith Corp. CEO Stephen Lacy and Altice USA CEO Dexter Goei.

“While we respect the private negotiations being conducted by Optimum and WFSB and make no representations as to the merits of either side’s position, we believe that the current impasse does a disservice to Connecticut families and we urge you to negotiate in good faith to bring an end to this blackout,” the Senators wrote.

Altice, meanwhile, said in its own statement, “We have been negotiating in good faith for weeks and made multiple offers to Meredith even though their initial request was for more than 800% over what we currently pay.”

Starting tomorrow, new customers signing up for AT&T’s 100+ channel streaming television package will pay $60 a month, up from the $35 promotional price AT&T has been advertising during the holidays.

Today is the last day customers can lock in the $35/month price, and those willing to pay in advance will receive either an Amazon Fire TV Stick (prepay one month) or a 4th generation 32GB Apple TV (prepay three months).

Since launching, DirecTV Now has received mixed reviews. Many customers like the wide range of popular cable channels, and access to HBO and Cinemax for just $5 a month each. But early after launch technical glitches also proved frustrating for many subscribers. Among the most common are cryptic error messages that claim viewers are attempting to stream from outside the U.S. and another that claims customers have too many concurrent streams running. Several app updates have been released to deal with the problems, and complaints seem to be easing.

AT&T hasn’t reported how many customers convert from its free trial to become paying customers, but some analysts remain skeptical if customers without cable television care about a streaming package of linear TV, even at the $35 price point.

Fool.com:

When it first launched, Sling TV seemed like it would be a big hit. That has not proven to be the case possibly because the cord-cutting audience has learned to live without cable and the cord-never folks (people who never had cable in the first place) perhaps don’t miss what they never had.

[…] By putting an end date on this promotion, AT&T can gauge whether enough interest exists in live-streaming television for the company to continue. These are products that seem like a good idea, that have so far been rejected by the marketplace.

That may be because even the top packages from the live-streaming services have holes compared to cable. In most cases they are missing at least some broadcast networks and their interfaces — while not bad for a digital product — are clunky compared to just flipping around with a remote control.

It’s also very possible that cord-cutters and cord-nevers are finding their entertainment elsewhere.

Rutledge: Not worried about the competition

The CEO of Charter Communications continues to consider “cable TV alternatives” like Sling TV and DirecTV Now not much of a threat, because customers appreciate the convenience of having local channels and DVR capability available, and cable operators claim they provide a better set-top box experience.

“I think there’s a lot of reasons why the packages, the big rich packages, will stay together, and why people will continue to pursue their historic [consumer] patterns,” CEO Thomas Rutledge told the annual Citi 2017 Internet, Media and Telecommunications Conference in Las Vegas.

For many ordinary cable TV customers, taking the final step of canceling cable TV has been more psychologically difficult than dropping services like a landline phone because the alternatives available in the marketplace do not yet match the quality and convenience of the cable package.

AT&T apparently also believes a-la-carte cable TV sounds better in theory than practice, considering its marketing efforts have focused on a cable television replacement that most closely resembles traditional cable’s bloated TV lineup. Sling TV’s slim package has not been as successful in the marketplace as some investors had hoped.

For AT&T, there may be more at stake than just a standalone streaming television package. The company announced last week it planned to provide DirecTV Now over its 5G wireless network it plans to test in Austin later this year.

AT&T wants to see how 5G networks manage heavy video streaming traffic, according to a company news release. The development of 5G, which can achieve 14Gbps speeds in lab tests, could be critically important to AT&T’s plan to gradually decommission wired networks in its rural telephone service areas. Should AT&T be able to demonstrate 5G is a more robust replacement for traditional wired communications networks, it could bolster its argument to discontinue wired telephone and broadband service. But it could also mean the eventual end of DirecTV’s costly fleet of satellites in favor of broadband and wireless distribution.

Is this the future of satellite TV?

Ten years ago, large programmers like NBC-Universal, Fox, Viacom, and Time Warner started bundling new niche channels into their programming packages, forcing pay television providers to add networks few wanted just to get a contract renewal agreement in place for the networks they did want. Now, in the era of cord-cutting, those programming conglomerates are preparing to slim down.

One of the largest — Comcast/NBCUniversal — is the first to admit “there are just too many networks,” to quote NBCUniversal CEO Steve Burke.

Burke warned investors back in July that axing networks like Style and G4 was just the beginning.

“You’ll see us and others trimming channels,” Burke said during Comcast’s second-quarter earnings call. “We will continue to invest what we need to invest into our bigger channels, and we’ll continue to trim the smaller ones.”

Cable operators hope that day arrives sooner rather than later as cord-cutting continues to have an impact on cable-TV subscriptions.

For every popular cable network like USA and Bravo, cable operators get stuck carrying ratings-dogs like CNBC World, Centric, Cloo, VH1 Classic, Fox Business Network, and Fuse — all of which attract fewer than 100,000 viewers nationwide at any one time. Fuse barely attracted 51,000 viewers in 2015. But just about every cable TV customer pays for these channels, and many more.

Many cable channels wouldn’t survive without subscription fees because advertisers consider them too small to warrant much attention.

While Burke’s prediction has yet to slash the cable dial by more than a few networks so far, it has slowed down the rate of new network launches considerably. One millennial-targeted network, Pivot, will never sign on because it failed to attract enough cable distribution and advertisers, despite a $200 million investment from a Canadian billionaire. Time, Inc.’s attempts to launch three new networks around its print magazines Sports Illustrated, InStyle and People have gone the Over The Top (OTT) video route, direct to consumers who can stream their videos from the magazines’ respective websites.

Fierce Cable this week opined that forthcoming cord cutter-targeted TV packages streamed over the internet from players including DirecTV/AT&T and Hulu, among others, will likely start a war of cable network attrition, which may make the concept of a-la-carte cable a thing of the past. Editor Daniel Frankel believes the future will be a finite number of cable networks delivered primarily over IP networks, which are expected to dramatically pare down the traditional cable TV bundle into fewer than 100 channels. Only the most popular networks will be included in a traditional cable TV lineup, and some of these providers expect to deliver a bundle of fewer than 50 channels, including local stations. Those booted out of the bundle may still find life from viewers going OTT, if those networks can attract enough people to watch.

AT&T is hoping for the best of both worlds as it prepares to launch an internet-based package of networks under its DirecTV brand called DirecTV Now. Sources told Bloomberg News AT&T is hoping DirecTV Now will attract more subscribers by 2020 than its satellite service. At some point in the future, it may even replace DirecTV’s satellite television service.

DirecTV Now is expected by the end of this year and will likely offer a 100 channel package of programming priced at between $40-55 a month, viewable on up to two screens simultaneously. The app-based service will be available for video streaming to televisions and portable devices like tablets and phones. No truck rolls for installation, no service calls, and no equipment to buy or rent are all attractive propositions for AT&T, hoping to cut costs.

Since AT&T has taken over DirecTV, it has lost over 100,000 satellite customers. The threat to AT&T U-verse TV is also significant as customers increasingly look for alternatives to cable TV’s bloated and expensive programming packages. AT&T no doubt noticed the impending arrival of Hulu’s cable TV streaming platform next year and other services like Sling TV. Deploying their own streaming alternative with AT&T’s volume discounts from the combined subscribers of DirecTV and U-verse means AT&T can sell its streaming service at a substantial discount.

If consumers find the offerings from DirecTV Now and Hulu a credible alternative to traditional cable television, cord cutting could dramatically accelerate, provoking a response from cable operators likely to offer their own slimmed-down packages. So being among the 100 or so networks carried on DirecTV Now, or among the 50 or so networks Hulu is planning to offer, could be crucial to the future survival of any cable network. Those stranded in the 500-channel Universe of today’s cable television packages could be forced off the air or to an alternative means of reaching an audience such as OTT.

The lesson learned by the cable television industry is that customers are tapped out and unwilling to pay ever-rising cable TV bills for dozens of networks they’ve never watched and don’t intend to. The longer term lesson may be even more scary for some networks. Live, linear television as a concept may have seen its time come and go, at least for entertainment programming. While viewers are always going to seek live television for sports and breaking news, alternative on-demand viewing of everything else, preferably commercial-free, is a growing priority for many, especially if the price is right.