Daily Archives: April 11, 2013

Continuing changes in the cable/no-cable TV landscape…

There was an interesting development in the “cord cutting” TV world last week. Aereo, a company which re-transmits broadcast TV from areas receiving rich sets of OTA signals, has passed a court test in the New York 2nd Circuit of Appeals. This has the broadcast networks in an uproar, and several are now threatening to broadcast fewer shows and make entertainment and sports available only over cable pay services. As I’ve discussed in this blog, I’ve “cut the cord” and rely on over the air (OTA) TV plus Netflix, Hulu+, streaming from network sites, and a growing number of entertainment apps in the iOS world (such as A&E, History Channel, Lifetime) that allow for shows to be “thrown” via AirPlay.

I think that while the broadcast TV networks would like to move in this direction, if they were to do so, I think it would help hasten the coming unbundling and breakup of cable TV as we know it, having a counterproductive impact by further fracturing the “packaging” of video entertainment. Already streaming providers like Netflix are producing original programming (the well received House of Cards which I need to watch!) and cable networks like HBO are experimenting with unbundled subscriptions in Europe. A few more “nudges” and we’ll see more original content produced for streaming providers. I think that at age 55, I’m somewhat unusual among my peers in ditching cable. However, the 20-somethings are a generation the cable providers don’t want to lose, but are in danger of doing so. My oldest son and his wife are looking at ditching cable for OTA. For many today, the Internet is more important than TV, and the $100+ per month that it’s easy to spend on cable can be used more creatively for discretionary entertainment. Sports is still the big draw, but the $5/mo/subscriber that ESPN charges the cable companies contributes to the escalation of monthly cable bills. Entertainment companies are struggling with how to operate in the current world order. In a recent New York Times article, the correspondent speaks of sharing HBO login credentials for use with HBO Go. I think that HBO is actually using this to understand what the demand is for unbundled internet access without actually formally committing to a product offering. Could ESPN and HBO subscriptions be not too far down the road?

What’s the bottom line? There are a lot of disturbances in the force. I think that we are headed toward a la carte unbundled subscriptions, but the cable companies are entrenched and don’t want to give up their business model. However, they are fighting a rear guard action as they retreat. The good news on the Internet front is Google’s Fiber initiative, now rolling out to Austin TX as well as Kansas City, Mo, and while Google’s business model is not likely to be a national buildout, they are doing enough to worry the cable internet providers that they could do this if the cable ISP’s are intransigent on carrying entertainments bits.

The next few years are going to be interesting!