I had a lunch meeting with one of my MDs about three years ago and the subject eventually turned towards cable providers and what shows we watched. He was adamant about cancelling his contract with Comcast at the time because "the content isn't any good and the customer service is horrible so I'd rather not deal with the headache. They told me I would need to return their equipment to a local retail location so I told them they had better send someone to get it or I'll start charging them rent." While that is a bit dramatic, the point here is trying to find out where the cable business goes from here.

Cable TV and internet providers consistently rank towards the top of the country's least favorite companies and there are a lot of good reasons. With the change in availability of content, we are poised to see a dramatic shift if the current revenue models for sure.

Newsworthy within the last few weeks is Netflix releasing their own proprietary content in the form of shows like "House of Cards" among many others and everyone was saying how much of a game-changer this will be going forward. Here is a company that abandoned the "traditional" channels of signing on with a network and instead chose to produce and distribute the entire series all at once themselves, on their own platform. Upon hearing this, I was reminded about Radiohead releasing their own album, for free, online without the backing of a record label. While it was indeed offered for free, consumers were given the option to donate to the band, which they did in droves.

"Thom Yorke told TIME, "I like the people at our record company, but the time is at hand when you have to ask why anyone needs one. And, yes, it probably would give us some perverse pleasure to say 'F___ you' to this decaying business model." On Sunday night, guitarist Jonny Greenwood took to Radiohead's Dead Air Space blog and nonchalantly announced, "Hello everyone. Well, the new album is finished, and it's coming out in 10 days. We've called it In Rainbows. Love from us all."

It was reported approximately 38% opted to donate, with an average donation of $6. The rest decided not to pay a dime. This is, of course, only one example from 6 years ago.

More recently, Kevin Spacey was featured as a speaker at the Edinburgh Television Festival to call into question all of the major cable television companies and their current business models. His argument was centered around the premise that they should,

"Give people what they want, when they want it, in the form they want it in, at a reasonable price, and people will pay for it, rather than steal it."

And later,

"It's content. It's just story. And the audience has spoken. They want stories. They'll talk about it, binge on it, carry it on their bus to work, force it on their friends..." To me, these are very true words we're seeing today.

Here's the article with video clip of Spacey's speech.

He points to the story when he was originally pitching the idea for "House of Cards." Every major network requested they write a pilot. Netflix said: "We ran the data and it tells us the audience will watch the series. We don't need you to do a pilot.." 113 pilots made, 35 go to air, and 13 were renewed. Last year 146 pilots were made, 56 to series but the outcome is unknown. The cost of these pilots is $300-400mm per year, making his joke that Netflix's deal for his show was pretty cost-effective.

People love stories more than anything. I, too, fall into this category since I look forward to Mad Men, Breaking Bad, Boardwalk Empire, and Suits every year. Just look at the recent thread on Suits on this very site for evidence that people get passionate about these series in a way that you never hear about with feature blockbusters anymore.

With the rise in digital forms of content and the myriad of devices for people to consume, there is a dramatic shift in the industry that hasn't been seen since the birth of the television, then the rise of the internet in every household. The question becomes though, where to go from here?

Mark Cuban has been an outspoken voice on the smart TV, where live television and social interaction with those events are another frontier for consumers. Sure, that's all well and good but that still factors in you'll need a provider like Fios or Comcast. Has anyone made the move completely off the cable provider invoice sheets and strictly streams media? Any regrets? Is it like those Vonage commercials about being rid of the phone companies for good? I have to say I've been tempted to try but just haven't pulled the trigger just yet but I'm close.

What do you guys think? Where does the cable television industry go from here? What are the pitfalls and how can we get the consumer back in the driver's seat?

I'll finish with a quote Spacey closed the speech with, from the late Orson Welles: "I hate television. I hate it just as much as peanuts. But I just can't stop eating peanuts."

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Comments (9)


Great post. Amazon and Netflix (though, more so netflix) are moving in the right direction regarding content. Giving people what they want. When they want it. The main reason for piracy is how difficult it is to get content.

I was reading a thread earlier today about someone who rented a movie to watch (DVD). There were 13 minutes of content that the person could not fast forward. So, they resolved to no longer pay for the content and just download it illegally because they were obligated to do something they didn't want to do and it ruined their experience. Slowly the movie industry will (hopefully) move to what music is doing. Flat rate to stream it unlimitedly. Maybe with some extra price on your smart TV (a la unlimited plans for mobile music) or whatever. I really hope Apple announces something with the publishers this week regarding content like that. I would pay for it in an instance [I find Netflix's selection of quality movies lacking].

On cord-cutting, there are many options (I'm still in college, so I don't currently pay for TV. Free cable from my school. I do have an Amazon Prime subscription, which I use for movies and for free two day shipping - if you're a student, it's free for 6 months and then 39$/year after). A great article by The Verge (sister tech site of SB Nation) on the war for your TV is here: http://www.theverge.com/2012/11/13/3640178/war-for...

I think in terms of the industry and investment wise, there will be a great deal of success for the first company that really figures movies and shows out. Whether it's the napster of movies that eventually turns into the Spotify of movies (not just original content, but all content). What I am fairly confident in saying is that people are starting to shift away for the limitations by cable providers and networks and into other products, so something is going to have to give on their end if they want to stay in the game.


Oh do pray tell from whom you will buy the connection to the Internet to stream all of this goodness, in 720p+ high definition, at adequate speeds (sorry DSL) and without data caps (sorry VZW / AT&T Wireless / etc.)? The leading broadband ISPs, in the US at least, remain the cable co's. So short of FTTH offerings like Verizon FiOS and GOOG Fiber really taking off, they're not dying.

But yes, pay TV subscriptions are likely going to decline going forward, no arguments there. Question is whether the MSOs will adjust Internet pricing and data caps / routing (rehashing the whole net neutrality debate), to compensate.


My roommates and I cut our cable. We use a combo of netflix, hulu plus, and another friend's HBO Go. Combined with Aereo, I get almost everything I got from cable and a whole lot more for ~$20/month. Plus, I'm not sending money to TWC, which is priceless to me. Fuck those guys.


The problem is the cable providers still hold the bandwidth keys. You can cut your cable tv but still need an internet connection. As revenues fall on the content side the cost to the consumer on the bandwidth side will drastically rise.

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In reply to heister

Yup, totally agree. I was recently in an apartment building a few years ago that was only let up for DirecTV and I was thinking of cutting them out and just buying a VZW hotspot for (hopefully) a cheaper amount. I didn't since I would have lost NFL redzone but it's just interesting to see new workaround options come to the masses for more alternatives than there were just a few years ago. I don't think we'll ever shift to a completely stream-only on-demand option for tv since live events garner a TON of viewers, it's a no-brainer to binge on entire seasons of tv shows in a weekend nowadays.


People who cut the cord amaze me. How can you live without live sports? firstrowsports and the rest just hurt my eyes. I want pure HD sports goodness.


I'd pay $10/mo per channel to be streamed through the internet via my ISP (which is usually the same company as the TV provider).

CNBC and BloombergTV are free, and I have Netflix, so these are the only channels I think I'd pay for:

2) NBC (Universally the best for pretty much anything)
3) AMC (Breaking Bad and Mad Men are just about over, so I'd scratch this one)

In reply to GoIllini

I agree. It's the absolute only thing keeping me from getting rid of cable.

In reply to GoIllini

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