Slate: Why Nobody’s Likely To Put Your Cable Company Out Of Business Soon

Slate Article:  http://www.slate.com/blogs/moneybox/2012/01/11/why_nobody_s_likely_to_put_your_cable_company_out_of_business_soon.html?wp_login_redirect=0

My comment:

Cable companies perform two main functions: Aggregation of content from the producers and delivery of the aggregated content to the consumer.
In the past, separate and dedicated cable networks were built. The barrier to entry was high which limited the amount of players. In addition to cable in the ground you needed set top boxes, engineers, etc.

Up to just a recently, there was no realistic, economic and easy to use alternative. For many years you could watch on a computer but it was no easy task to get a quality image on your TV with a remote control.

Being at CES I see a huge amount of TV’s with easy to use interfaces and may well designed alternative sources of content.

Accessing many channels freely broadcast over the internet and subscribing to Hulu Plus, Netflix and allocating small monthly budget to Amazon, Apple or other internet VoD services should deliver quite a bang for your entertainment buck. You can have the equivalent of 100 channels (Large VoD library plus quite a few linear channels) for around $30/month

There will always be certain content that will cost more money such as sports or some niche channels. Sports are expensive with NFL costing up to $350 per year and MLB at $100. If people move away from cable creating a larger demand for these sports services I expect the cost to go down radically. The simple reason for this is that it is too easy to create pirate feeds of the games and at $350 per year there is way too much motivation for people to try to lower costs even if it may be illegal. This is the same market force which brought you the $.99 single track you want instead of the $15 CD with the additional unneeded 12 songs.

At the end of the day, CableTV operators, Phone companies and OTT providers are in a three way competition that did not exist just a few years ago. This is competition and technological advancement. As always these factors will reduce costs yet may leave a few bodies along the way.