Millions of tenants have to reorient themselves when watching television

Since the 1980s, landlords have been allowed to pass on TV fees to ancillary costs. Until now, this has mainly benefited cable network operators. But this will soon come to an end - the legal deadline ends in July. Around twelve million tenants will then have a free choice, cable providers fear losses.

In six months at the latest, millions of tenants will have to make new contractual arrangements in order to continue watching television in their homes. A legal deadline expires on July 1 - from then on, landlords will no longer be allowed to pass on TV fees as ancillary costs. For years, this practice affected around twelve million tenants. The service charge privilege introduced in the 1980s, which gave cable network operators Vodafone and Tele Columbus an advantage, is now coming to an end.

An alternative to cable television is TV transmission via the Internet, and providers such as Magenta TV from Deutsche Telekom as well as Waipu and Zattoo are now seeing an upswing. The top dogs must be prepared for a loss of customers, as some tenants want out of the previous compulsory payment. Cable fees had to be paid by every tenant whose landlord wanted them to be paid - even if the tenant no longer uses linear television at all.

Some tenants paid twice - for the unused cable connection and for another transmission channel that offered more options. However, many are likely to have shied away from such a double payment - if the compulsory payment for cable is abolished, the demand for competing offers will probably increase.

Cable providers are threatened with losses

In an investor presentation, Vodafone addresses the consequences of the change in the law, citing an annual turnover figure of around 800 million euros. The "Frankfurter Allgemeine Zeitung" had previously reported on this. This figure relates to 8.5 million TV customers who come via housing associations. According to Vodafone, it has a total of 13 million cable customers - the majority of which must now be contractually re-regulated.

"It will certainly be challenging," says Vodafone manager Marc Albers with a view to the impending losses. "Nevertheless, we are optimistic that we will continue to convince tenants with our offers in the future." Tele Columbus states that there are "certain business risks".

The companies are now offering new contracts and agreements with which tenants can continue to benefit from relatively favorable conditions outside of ancillary costs. To this end, the cable providers have entered into cooperation agreements with housing associations. This was one of the advantages of the previous apportionment system: because landlords concluded large contracts with many users with the cable providers, the average price per apartment was low - according to Vodafone, it was previously seven to nine euros.

It will be slightly more expensive for cable customers

In future, it will be eight to ten euros - provided that one of these new agreements is used that contains a certain number of users. If, on the other hand, there is no framework agreement and the tenant is on his own as an individual customer, he will have to pay Vodafone just under 13 euros per month in future. In the battle for customer favor, Vodafone is also relying on the power of habit. "Market research shows that many tenants tend to be "TV purists", for whom their usual programs are more important than streaming services or Internet TV," says Albers. "Nobody wants to re-plug cables, install additional devices, use a second remote control or re-sort programs. With cable TV reception, everything stays as it is."

Deutsche Telekom takes a different view, with Arnim Butzen, the manager responsible, pointing to the changed habits of many people. "Unlike with cable TV, Magenta TV customers are not tied to one place like the living room," he says. "They watch TV when and where they want: at home on their TV set, on the train on their smartphone or on the balcony with their tablet."

Competitors are hoping to gain as large a share as possible of the market, which has so far been firmly in the hands of Vodafone & Co. "According to our estimates, cable providers could lose up to two thirds of their TV households," says Telekom man Butzen. "The abolition of the service charge privilege is a great opportunity for our TV offering, we can only gain." A significant increase in customers is expected. Vodafone, on the other hand, refers to a survey it commissioned itself, according to which most cable customers do not actually want any changes.

Only a few "cable cutters" so far

Frank Lilie from satellite TV provider Astra considers many market forecasts to be speculative. "But one thing is clear: there will be a move away from cable - and TV reception via satellite will benefit from this." TV access via a satellite dish on the balcony or roof is an alternative to cable TV. There is also aerial television and the aforementioned online services. Anyone with an internet connection can access a wide range of TV channels and streaming services via Waipu.tv, for example. According to the company, Waipu already has 1.3 million paying subscription customers and the trend is rising.

Competitor Zattoo also claims to be on the rise. The company sees "enormous opportunities" in the expiry of the legal deadline and expects to be able to "convince a significant proportion of existing cable customers willing to switch to our offer", according to Zattoo.

Cable provider Tele Columbus with its PYUR brand is relaxed. "We assume that customers have already made their decision regarding their choice of distribution channel," says press spokesman Sebastian Artymiak. According to him, the loss of customers has so far been limited: "The proportion of so-called cable cutters is still low."

The law that sealed the farewell to the ancillary cost privilege came into force in December 2021, including the transition period until mid-2024. And what happens if nothing happens by 1 July - if the deadline passes and no new contractual arrangements have been made or no switch to another transmission channel has yet taken place? The switch-offs will certainly "not happen all at once", says Artymiak. "But it is true that cable connections without a contract will ultimately be shut down."