Not so fast! The only (and I mean only) thing that’s going to kill cable bundles is an unprecedented subscriber exodus. The author even writes that the cable bundle “is still growing by hundreds of thousands of subscribers a year. Innovation is an answer to a problem. As long as cable providers don’t have a revenue problem, they have less need to innovate.” Not only does the author contradict article’s title in the body but his facts are off too, according to Nielsen cable subscriptions decreased by 100,000 in Q3 2011 but “TV still retains the lion’s share of people’s free time.” (NYT article here) What’s really happening is that people are ADDING screens (and screen time) not replacing them. People are adding Hulu, Netflix, internet surfing, and mobile tweeting activities at the expense of their waistlines not ratings.
True we replaced paper newspapers with digital ones and generally speaking the print industry suffered at the long arm of the internet but that has nothing to do with television. This article is just plain and simple fear mongering. First of all the physical television set will never cease to exist. The big screen in your living room will ALWAYS be there. What content is piped in? Now that’s a different story, regardless you can’t rewire 60+ years of TV viewing habits in a decade.
The death of TV? Are you kidding me? Carriage disputes between operators and content providers are nothing new, they exist as part of the industry’s eternal dance. Yes, the DirecTV/Viacom mess is the largest we’ve seen in a while but like the rest it will get resolved.
The real problem with the cable industry is how advertising is bought and sold (how DirecTV makes money). Operator focus should be on repackaging audiences using STB data (after all DirecTV is working with Kantar and Nielsen to monetize audience measurement data) and movement away from broad stroke demographic decision making. For example, a buyer only interested in top 5 cable nets for M18-35 during prime is not only wasting tons of money but missing out on tons of 18-35 males in the long tail. Use set-top-box data to take advantage of dispersed, long tail cable audiences and charge more money for targeted spots, deeper reach into target demographics, and increased inventory management. This is where the carriage conversations with Viacom should take place.
TV as we know it is so far from dying and viewing habits are far from changing. There is nothing out there yet that can deliver the couch potato, channel surfing, quality content, background noise that is cable TV. Let’s redefine stale business plans not take subscribers hostage. Also please stop scaring cableTV executives.