Stemming from last week’s cable show, we saw a ton of coverage around cable and satellite providers looking to keep their momentum and prevent being undermined by Internet TV sites. As we all know, more and more people are going on the web to watch their favorite shows, which means traditional TV is becoming less of an option and cancel the cable and satellite subscriptions is becoming increasingly popular.
One of the discussions that derived from The Cable Show is the idea of a “pay-TV subscription,” where cable providers would give users access to shows online through a site only available to cable subscribers.
An example of this idea is the new “HBO Go,” spearheaded by Time Warner, which would provide online viewing of top HBO shows to subscribers that already pay for the premium channel. The service would aim to give subscribers with as many options to their network shows, as long as they are in reach of an internet connection. As we’ve seen from a business standpoint, this method is a safe-guarding tactic for cable networks as The Los Angeles Times notes that…
The Time Warner approach is designed to preserve the program exclusivity for which cable operators pay cable networks. The fees by some estimates account for half a cable network’s revenue — and in the case of HBO, which does not carry advertising, all of it. The cable industry fears that it will lose subscribers if its shows pop up for free on the Internet.
What is interesting, is that although many believe online video will only continue to strengthen and become more prevalent, an analyst from Leichtman Research Group Inc., negated that:
People aren’t abandoning their cable to watch online.. This cord-cutter stuff is anecdotal. There is no trend in it happening, nor is there any evidence in our data that it will happen.”
It will be interesting to see what comes about. It’s apparent that the huge shift in online video and Internet TV is causing enough commotion that cable service providers are looking into new ways to distribute shows and convince subscribers to stay loyal to their cable and satellite subscriptions. Yet others believe that the traditional TV is so embedded into our every-day lives, that there is no way it’ll be abandoned.
If you look at out recent “Man on the Street” video, you’ll notice a common theme: people prefer online content as they can watch their shows when and when they want it. Convenience and simplicity is key and as more sites begin to stream full-length shows online for free, we may see people drop their remote, cancel their subscription and utilize the computer for content and entertainment purposes all the way.
For more information on these topics, check out this BusinessWeek article.