There are a bunch of interesting articles over at Wired about the cable industry. The first one is about how the industry is slowly changing, the second could be my own blog entry lamenting the declining value of cable service, the third is about how carriage fees (and ESPN) make cable subscriptions so expensive, and the fourth is about different media streamers for those out there interested in cutting the cord.
I think the ideal situation is one where cable companies become bit haulers, providing access to a data pipeline that can be used by the customer to access what they like, be it phone, TV or Internet. And really, with services like Hulu and Netflix, TV and Internet are becoming one and the same anyway. Heck, even live programming is available from sources like ESPN3.
This reduces the headaches for cable companies because now, all they need to worry about is providing their pipeline to as many eyeballs as possible for the best value. They no longer have to worry about striking deals with content providers (like HBO and Disney) because all the providers need is a website to offer their content. In essence, the cable company is relieved of it’s middle-man role.
Another interesting consequence is that potentially anyone is a content provider, since it’s not just the Disney’s of the world that have websites. It only costs about $10 a year to own a domain and another $50 or so per year for a webhosting service (or the cost of maintaining server equipment if self-hosting a site). Thus, the barriers to entertainment entry are lowered a notch because the upfront costs for getting involved are reduced to maintaining a domain and it’s content be it video, photos or text.
Under this arrangement some pretty large revenue streams for content providers disappear, so don’t expect it to happen any time soon. Most likely, cable viewership would have to really start to crater (ie, the market disappears) before something like this could become a reality. Another possibility is that some upstart network becomes a hit streaming their content for a minimal fee (ie, a disruption from below), circumventing cable providers in the process by adopting a streaming-only approach. If that happens, then I could see the whole thing, as it currently stands, coming apart pretty quickly.