Fortune telling is one of life’s less profitable industries…but trends don’t lie.
Cable TV subscriptions offer more channels than ever before. Yet their industry is still dying. Since 2011, cable TV subscribers have seen only negative growth. Perhaps because subscriber’s fees jumped from an average of $66/month to over $100.
Here’s Business Insider’s graph on the death of cable TV.
The signs are here. All premium channels (HBO, Showtime, Starz, etc) offer Netflix-like subscriptions, bypassing cable boxes. Most basic cable channels (FX, AMC, news, etc) still require cable subscriptions.
But a new trend has emerged: buying TV shows outright. Amazon and iTunes offer movies and TV on-demand, pay-per-episode or by whole season- in real time. So as The Walking Dead episodes are released, cord-cutters can buy them the same the day.
In fact, HBO and Showtime releases Game Of Thrones and Homeland on their apps before the episodes air on cable. And some estimates show that the most popular TV shows are pirated online more than they are viewed by cable subscribers.
As for cable news, non-subscribers can still watch clips online for free. Because MSNBC, CNN and FoxNews need the value of website traffic from cord-cutters to stay mainstream. Think about that: major corporations are offering free content because they can’t ignore non-subscribers.
So my prediction: cable TV and satellite boxes will be gone in 5 years or less. Cable companies will offer access to premium and basic cable networks online. Dish Network and DirecTV will abandon their satellite installations at subscriber’s homes and rely solely on internet-based streaming.
This is predicated on the nation-wide goal of developing universal wifi-access to rural areas. Google’s Project Loon- wifi balloons launched 18km into the stratosphere- and well funded organizations like the Alliance For Affordable Internet (A4AI) will most likely see to it that every household in America- then the world- has access to the internet.
The economics are clear: access to the web means higher income, as discovered by the Choi/Yi study.
So all is not lost for cable companies. Though they will have to resort to the most despised route in business: adapting.
(topics: cable TV, media, Comcast, Time Warner, AT&T, cord, cutters, wifi, internet)