Yes, if cable insists on forcing square pegs into round holes...
We've frequently discussed how the TV industry (both phone and cable) is collectively working on an online video service that takes some existing content and puts it behind a paywall -- accessible only to users who have cable service. The idea has long been that this will stop users from cutting the cord and moving to competing Internet-based services, though there's been some bickering with broadcasters over compensation
, and the idea seems to be a jumble of non-standards from one operator to the next
. Comcast is so far the first to launch their TV Everywhere effort, and opinions are mixed
directs our attention to a piece over at MediaShift
, where author Mark Glaser argues that TV Everywhere is going to fail, and it's going to have nothing to do with broadcaster disputes, clunky GUIs, or inconsistent standards. It's going to have everything to do with the fact that the cable industry believes they can take their old business model, and violently force it upon the new broadband-driven Internet:
The cable companies have no plan to give people the option to access Xfinity or other TV Everywhere services for a fee instead of forcing them to pay for cable TV. That means this is not a strategy for working out an online business model (either through advertising or paid content, or a mix of those or something new). Instead, the cable companies have one aim: Protect the old business model. Again, this is not a strategy born from innovation or smart thinking about new platforms. This is survival mode and all about protecting the old, broken way of doing business.
If you talk to cable industry executives right now, most of them are almost glibly confident that cord cutters are a very small niche segment, and not something to worry about. And for now, they're right. Cable's incredibly-robust infrastructure is in place, works great (usually), and even during a recession and despite endless rate hikes -- consumers continue to throw money at the industry for hundreds of channels most users never watch. But if you've watched the evolution of broadband and Internet content, you know that despite what Mark Cuban wants to believe
, Internet video is a very real threat.
Right now, slow last-mile speeds, terrified Hollywood studios, and clunky first-generation home video solutions are keeping Internet video out of the mainstream. But it's only a matter of time before speeds increase, cheaper and simpler home broadband video services appeal to the cost-conscious, and consumers gladly begin fleeing a sector that has pounded consumers with an endless stream of rate hikes, forced them to buy bundles of channels they simply do not watch, and continues to have some of the worst consumer satisfaction scores across any
industry (even the IRS).
Traditional cable will still dominate for much of the next decade; this is going to be a slow (r)evolution. But the industry does have one hell of a fight coming down the pike. While some cable insiders work a little too hard trying to convince you of cable's infallibility, the insightful insiders know things will be getting rocky. That's why just like wireless carriers, who fear the impact mobile VoIP and push IM have on voice and SMS revenues, the cable industry dreams of a broadband future where you're paying one hell of a premium for every gigabyte delivered
-- so if you do someday switch to Internet video -- they'll still get their pound of flesh.