Telecompetitor Arches

Is Cable TV “Toast”?

There was a time when a reasonable person might have questioned the extent of demand for “cable TV.” Why people would pay extra when they could just watch broadcast TV did not seem to make sense. But then cable TV changed, transitioning from its original “antenna reception” to the “more choice” platform it uses today.

Lots of observers have to be wondering whether something about that significant could happen within the next decade or so. Granted, that pace of change would seem glacially slow to people expecting change at the rate of web apps, but the TV ecosystem is much more highly integrated, unlike the loosely-coupled Internet ecosystem.
But that same loose coupling could be a huge issue if content owners and networks decide to make lots more content available for Internet streaming, and if the rest of the supporting ecosystem can get critical mass. Those are big “ifs.”
Still, even some executives in the multichannel video business seem convinced huge changes are possible. Shawn Strickland, Verizon VP, says the firm, which offers FiOS TV, now believes a substantial amount of video cord cutting will happen.
“We’ve been looking at this issue for the better part of a year, and our perspective has pretty much done a 180 to a belief now that pay-TV ‘cord cutting’ will happen,” he says.
SNL Kagan forecasts that by 2014, about 46.3 million homes will have at least one TV with a broadband connection to the Internet and seven percent of all households will depend on the Web instead of pay TV to watch professionally produced content.
But massive change will take a while, even if content owners are willing to disrupt the existing $140 billion annual revenues business built on multichannel entertainment of the linear sort. It might be odd to position IPTV as an interim or transitional business, but that is what might turn out to be the case.
But it might take longer than many seem to believe. Cable TV did not have to cannibalize an existing substantial business. Internet TV will have to, so there will be more resistance, from consumers, not just providers.

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