TV Viewing Trends: Is Cable On the Fast Track to Oblivion?

According to journalist Michael Wolff, cable is on a fast track to oblivion with an unsustainable business model. Currently, cable operators pay media companies to carry their cable channels, then pass the costs onto customers in the form of large bundled cable bills. After that, cable channels get to sell advertising. But as viewing habits change and new options become available, consumers are increasingly abandoning the traditional model.

“The cable industry regularly rushes to announce that ‘cord-cutting’ is a limited issue, when virtually everybody has cut it or is flirting with the possibility of cutting it or being harangued by their children to do so,” reports Wolff for USA Today. A la carte viewing is the future, he suggests, and bundling will soon be a thing of the past.

With a la carte, the viewer can buy what he or she wants when he or she wants it. Additionally, “cable technology stagnates, while digital technology ever improves,” making way for advances in the digital realm and thus leaving behind the days of cable. One example of this is the Google Fiber infrastructure, “which will increase speeds by 100 times current standards. The first test is now being built in Kansas City,” notes Wolff.

He calls the situation an example of “modern business myopia,” when a company “has an installed base that is so large, and throws off so much cash, and which has so many people dependent on it, and necessarily committed to it, that it is in no one’s interest to truly question it. What’s more, transformation, even though you can see it coming, takes a long time to actually be felt by a system this vast and inured to change. We all know that cords are being cut, and yet the system isn’t registering it because the cash keeps coming.”

Moreover, the “mighty cash flow, the gargantuan size of these businesses and the unhurried pace of reality creates a certain executive hubris,” writes Wolff. “Detroit saw foreign cars coming and did nothing. The music business saw its products being stolen and hardly blinked. No need to mention banks and bad mortgages.”

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