This year’s version of the death of cable is kind of like the previous versions
I have been writing about the cable/satellite industry for several years now. This 2010 post in my Empoprise-BI business blog links to some of my earlier posts on the subject. The basic issue is that you have content providers (such as Comcast/NBC) and cable/satellite providers (such as Comcast), and the two factions are constantly at war with each other.
Those who believe that content is king have been saying to themselves, “What if we could eliminate the middleman and get the content directly?” Well, in some cases you’ve been able to do this for several years now. Back in 2010, I quoted from a Mike Johns comment on a Michael Hanscom post:
The coolest part of the Roku is what it means for the future of TV. I have already dropped my cable and pretty much watch all of my shows on Netflix. The other channels on the Roku, even the premium channels, make it worth the money. I spend 9 bucks for netflix, and 6 bucks on the kung-fu, cowoby classics and drive in movies – and that has replaced my $75 cable bill.
Since Mike Johns wrote that comment, Roku and others have provided complete direct access to content, and the cable and satellite providers have all shriveled away.
What? They’re still around? Whoops.
Obviously, cable and satellite providers aren’t going to just wither away when their lifelines are threatened. They need to maximize their profits for their shareholders, and they’ll do anything in their power to ensure that their business model remains viable. Earlier in this post, I alluded to the fact that Comcast, a cable provider, has purchased NBC, a content provider. It’s kinda like when tobacco companies buy food companies (remember RJR Nabisco?) – a company will do whatever it wants to continue to survive.
Newly launched website TakeMyMoneyHBO.com wants to send HBO a clear message: We love your shows. We’re willing to pay to watch them upon release. Now please, for the love of Winterfell, give us a way to do that — without forcing a cable subscription down our throats.
The expectation is that HBO will see this website and observe all the tweets – with hashtags! – and will suddenly and immediately tell the cable and satellite companies, “Thanks for all you’ve done for us for the past half century, but based on these powerful hashtags we’re going to go it alone.”
For some reason, I suspect that TakeMyMoneyHBO’s strategy will not be entirely successful. Wendy Cockcroft has noted that HBO benefits from the current system.
When the interviewer presses [HBO’s Eric Kessler] again about a stand-alone option, here’s what he has to say:
“We benefit from the existing ecosystem… from bundled cable TV packages… it’s important to keep that transactional machinery going. It’s about economics.”
Kessler says here that he’s doing better from an economical point of view in the current HBO strategy than he would if he opened up the content safe and let some goodies out into the cloud.
Some people think that piracy will drive content companies to create a new model that reduces piracy, but if content companies are making enough money under the old model, why change?
Now I still believe that it’s entirely possible that the middleman may be eliminated, but rather than cutting the middleman out entirely, perhaps the middlemen may continue to buy content providers just like Comcast did.
However, presently the old model is still very much alive, which means that if I want to see or hear a sporting event, more often than not I have to turn on a TV or a radio. With some rare exceptions, I can’t watch or listen to a sporting event over the Internet. We of the Internet just don’t pay enough money to get the rights.