This Isn't Your Father's Chevrolet...err...Television

The battle between pay-TV providers (cable and satellite) and content providers continues. The latest bout is between CBS and Time Warner Cable along with Bright House Cable. At the moment over 3 million viewers cannot receive their local CBS affiliates because TWC and Bright House refuse to pay what they see as seriously overpriced retransmission fees. This sounds a lot like rearranging the deck chairs on the Titanic.

Unless CBS is totally clueless, their share of TV viewership is shrinking as it is for the other three networks (ABC, NBC, and Fox). Is it that people aren’t watching TV as much as they did in the past? Or is it that people are watching TV differently than they have in the past? Of the two, I’d have to say the latter is more likely because the number of traditional pay-TV subscribers is dropping. Subscribers are “cutting the cord”, particularly those with Internet-connected TV’s.

More people are using the Internet to watch TV, be it YouTube videos or episodes of their favorite shows directly from the TV network websites or through Netflix, Hulu, iTunes, or a host of other video streaming websites. This is a change that both the content providers, i.e. the various TV networks and cable channels, and the cable companies themselves ignore at their own peril. Because newer TVs or their peripherals (BluRay players, Roku, media players, or X-Box) are Internet enabled and the large number of computers, tablets, and smart phones, the need to receive programming by way of traditional methods – over the air (OTA), cable, or satellite – is shrinking. On the other hand the number of Internet subscribers is climbing, particularly for cable operators. For many cable companies the number of Internet subscribers is larger than pay-TV subscribers. It's also much more profitable than video.

The smarter cable providers are already pushing so-called Over The Top (OTT) Internet-based video services, preparing themselves for the time when most of their customers will be using the Net for all of their television viewing. It also stands as a warning to content providers that their days are numbered if they don't stop demanding increasing fees that prices them out of the market. But I have a feeling that a few of them are going to have to learn that lesson the hard way and will stand as object lessons to the rest.