A while back I got in a big argument with a buddy who used to work for a big cable company. My argument was that cable companies are going to die off if they do not change the way they do business, and the future of media is going to through your internet connection. All TV and home movies will be watched through your internet connection, and there will be no reaso for you to pay big money to Cable companies. I, like everyone else, am sick of the way the cable companies run there monopolies, and believe that the costs they charge people to watch things that they can get for free on other mediums is absurd. Think of what is happening with Newspapers. Why would somebody pay for a newspaper every day, when you can get your news for free? Anyways I stumbled upon this aricle a while back and it basically backs up my argument. To be fair, the person I was having the argument with believed that it would be impossible to stream the quality of video that you receive through your cable companies over an internet connection. Especially a wireless connection. My belief was that the phone companies would become the new monopoly of media. They would provide you with your wireless internet connection, and you could stream whatever television show, movie, game that you wanted directly to your PC or Television set. He may have been correct in saying that, the article doesn't really touch on the technology. I am not saying that we will be able to get all of our media for free, I dont believe that to be the case at all. However I think so much of what drives the cost of cable companies is the fact that the consumer has so few options. If i want cable right now I have to either go with Charter or I have to with Dish. So they can keep fucking up my bill every week, charging me more and more, and i can do little about it. However eventually every television show, movie, or game will be available online. You will be able to directly to the HBO, ABC, and ESPN and stream your content directly to your TV, PC, or Phone. There will be need to pay those ridiculous costs and deal with that horrific customer service.
The reason for this post was not to say I won my argument. I am fascinated with where media is headed and far this technology has come in such short time. With wireless devices like the Iphone being able to stream live video in HD quality, it is amazing to think how much information your PC or TV will be able to handle. Look at how much traffic sites like Hulu and Youtube get each day. I just posted the other day how I can stream movies from netflix through my Xbox live account. There are still some obstacles in the way, heck my parents are still using dial up for the internet connection so it is foolish to think these changes will happen anytime soon. I dont really know when these changes will take place, but I do believe they are coming. Anyways I think the article covers what I said here a lot better than I could explain it. It is worth taking a look. Let me know what you think.
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3 comments:
I do think there will be a time when you can get HBO programming directly from HBO on the internet without signing up for a package from the cable or satellite company. However, I don't think those bundling services will die, simply because there is money in it for the individual networks.
A lot of cable networks make their money by getting into the bundled programming that the cable and satellite companies cram down our throats. You can't get just CNN, ESPN, and HBO. You have to pay for a package of 75 or 150 or 290 channels, each of which gets a cut of your monthly payment.
Big Ten Network was a classic example. They did NOT want to be a subscription service that I would have purchased for $7 per month. What they really wanted was to be in the basic packages for cable and satellite and to get a fee for every package subscriber, whether they ever tune into BTN or not. Their whole dispute with cable was over how much that number was going to be. By being in the package, they make more money and they get more exposure to other viewers who would not have purchased the channel individually.
Even bigger, BTN makes a shitload of money on advertising BECAUSE they reach 30 million homes, and then based upon their ratings. They would not get nearly as much for their advertising half-minute if the commercials were airing only to people like me who would sign up for their service individually. (By the way, I would sign up in August and cancel in March every single year if it was an individual channel. Because it's in my package, I pay them all year.)
So, because of the interests of each network and their desire to get paid for the programming they invest millions to produce, I think there will always be an incentive for them to join package marketing groups, whether it's cable, satellite, fiber optic telephone lines or internet connections. There will always be somebody to overcharge us for the stuff we don't want in order to get the few things we really do want.
Take BTN, because of the cable / satellite mafia, they are now reaching over 30 million cable / subscribers and getting something like 30 cents on average per month from each of those 30 million homes. (They get closer to a buck in the 8 Big Ten states, and something like a dime elsewhere.) If they offered their service directly over the internet in super fast HD quality for 5 times as much, they would still be losing money because they'd only get a small fraction of those 30 million folks to actively seek out BTN programming.
The bundling is in everyone's interests except the consumers. You know how that turns out.
TK,
Very good points. I would agree that the bundling of TV channels is how the networks make there money. They can make sure that they sell advertisements that will be watched by millions of people and thats why advertising loves the cable companies. However I do believe that much like Newspapers when enough people stop buying from cable companies the advertisements will start to stop forcing the cable companies to change there model. I am not sure how exactly Hulu can show TV shows, like they do, but you literally can find just about any show on there. I think at some point the advertisements are going to go directly to the internet sites and stop bidding against each other for spots on the networks. It may be a pipe dream, but if the advertisments will leave the cable companies are doomed.
I have no well thought out or extremely valid points to make but what I can tell you is that the company I work for is an internet based high schoool sports network. This company originated about a year ago and is privately funded. Two of our major investors are guys named Monty Rifkin and Trygve Myrhen. Some will tell you that these two men are a couple of the minds that built the modern cable television industry. Myrhen once ran Denver-based American Television Communications — now Time Warner Cable — and launched the Food Network and E! entertainment cable networks. Jookt.com attracted him. Myrhen said, because it creates an online community for an age group that gets more entertainment from the web than from TV. Not sure exactly where I fall in regards to this argument but according to these two men it does seem that the way people receive media is rapidly changing.
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