NEW YORK (TheStreet) -- This year, the advent of the so-called "skinny bundle" of TV channels streamed over the Internet has offered consumers the promise of the biggest change to TV viewing since the rise of cable more than 30 years ago. But the lack of channel selection needs to be overcome for wide consumer acceptance.

With packages that come with between about 20 and 50 channels, which, on the surface at least cost less than many standard pay-TV packages, skinny bundles offer a respectable alternative for viewers interested. However, none of the most well-know skinny bundle-- Dish Network's (DISH) - Get Report Sling TV, Comcast's (CMCSA) - Get Report Stream or Verizon's (VZ) - Get Report Custom TV -- give consumers the option of complete a la carte channel selection, considered by many to be the Holy Grail of TV service. By offering fewer channel choices for consumers, it's possible the new services may be hindering their chances of success against the entrenched pay-TV offerings.

"Many consumers whine and complain about cable, but most of them actually like what they already have," said Laura Martin, media analyst with Needham & Co. "You may get a new viewing choice [with a skinny bundle], but it may turn out that when the consumer gets that, he might figure out what he had before was better because they had all the channel choices they wanted to begin with."

And with all those choices already established, it's estimated that skinny bundles will need several years in the market before consumer attitudes shift toward viewing fewer channel selections as a real option.

"I don't believe there's really a serious cord cutting situation," said Gartner analyst Fernando Elizade, referring to the concept of canceling traditional pay-TV service and watching TV solely from services like Hulu and Netflix (NFLX) - Get Report and using over-the-air digital antennas to get local network TV channels.

There were 94.9 million pay-TV households in the second quarter of this year, according to research firm Leicthman Research Group. Elizade said he estimates that as many as 50% of newly formed households by 2019 won't subscribe to traditional pay-TV services. But for now, cutting the cord on cable and satellite remains a seasonal event, with most of it happening in the summertime as college students leave school and TV services providers trim down on their promotional efforts.

For the major skinny bundle services, part of the allure comes form prices although are typically lower that those charged by cable or satellite companies.



Sling TV, from Dish Network, has received a lot of attention since its launch in January because of its $20-a-month live TV package of 23 channels which includes Walt Disney's (DIS) - Get ReportESPN, AMC (AMCX) - Get Report and other networks. Subscribers can add additional packages starting at $5 a month, and can get HBO for an additional $15 a month. Most notably, Sling subscribers don't have to be connected to a specific Internet service provider to use the service.

Comcast just launched its own skinny bundle, called Stream in Boston, and plans to offer the $15-a-month service in Seattle and Chicago later this year before a larger roll out in 2016. The service allows subscribers to stream live local TV channels, Time Warner's (TWX) HBO and a handful of other channels. However, Stream will only be available to Comcast Internet subscribers and, at least initially, only allows programming to be streamed to mobile devices or computers and not TVs.

Telecom giant Verizon and its FiOS service has also jumped into the skinny bundle arena with its Custom TV offering, which for $55-a-month, offers a base package of 45 channels, including local broadcast networks, and the choice of two additional "channel packs" from categories such as sports, kids and news. More packets can be purchased for $10 a month each.

Colin Dixon, principal analyst with media consultancy nScreenMedia, said that the slimmed down offerings of skinny bundles do give customers a little more control over their TV costs, but also reflect the challenges that come with putting to get a new business model in an established industry.

"It's tough putting those bundles together," Dixon said. As an example of that, Dixon said Sling TV officials told him the company had to negotiate all-new deals with content providers that included some limits for Sling's subscribers. "It also came with restricted rights on some channels," Dixon said. "For example, you can't pause or rewind ESPN on Sling TV."

The biggest gauge of the success of the skinny bundle will ultimately lay in subscriber numbers, which, so far, have aided in skepticism about the nascent industry.

In early August, Dish said that it signed up 169,000 Sling TV subscribers at the end of March. However, Dish hasn't provided any more Sling subscriber data, and is now including such figures with its satellite TV subscription numbers. Dixon, estimates that Sling might now have about 250,000 subscribers. Verizon recently said that about one-third of its 26,000 new FiOS subscribers in the second quarter signed up for its Custom TV option.

The economics of the skinny bundle may also end up providing an impediment to the concept's acceptance among consumers.

The packages that are available, at extra costs, all concentrate their channels along specific themes. Verizon, for example, offers a Triple Play option with its Custom TV, Internet and phone service starting at $69.99 a month for one year. But that cost goes up depending on how many additional channel packages a consumer may add. By comparison, a regular Verizon Triple Play offering, with 235 TV channels, starts at $94.99 a month.

And since viewers may watch everything from ESPN to Disney Channel to Bravo in one sitting, the familiarity of a traditional cable or satellite package one has had for years may just make it too easy to cut the cord or slim down their TV channel options.

"It may end up being more expensive for what you get, when you think about how much it costs per channel," said Needham's Martin. "And when you start adding packages and Netflix and dealing with different on-screen interfaces, you have to wonder if you end up saving money and confusion."

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.