Keeping Cable Companies Relevant

A few nights ago my wife and I wanted to watch Game 4 of the Heat-Pacers game. However, with her being 38 weeks pregnant she didn’t want to sit or lay anywhere but our bedroom where we have made the decision not to have a TV.

I pay Verizon something like $150 a month for TV + Internet, so I was sure there would be way to legally watch the game on my laptop or iPad. Turns out there my options were disappointing: an alternative camera feed of the baseline camera operator on TNT’s website. There was no court-side video, which is how you’d typically watch a basketball game.

I grumbled about how I’d love to cut the cord and be able to watch everything digitally on Netflix and Hulu+. Ironically, the next morning Ben Thompson posted his thoughts on the fantasy of cord cutting:

Cable TV is socialism that works; subscribers pay equally for everything, and watch only what they want, to the benefit of everyone. Any “grand vision” Apple, or any other tech company, has for television is likely to sustain the current model, not disrupt it.

Cord cutting is becoming more common. By 2011 over 2 million households weren’t seeing the value in paying Comcast and others $100+ each month.

But cable companies add value in 2 ways to the content ecosystem that is difficult to replicate or disrupt:

  1. They are the gatekeepers of delivering content to your TV.
  2. They are aggregators of content, bringing in a huge lump sum from millions of consumers and dispersing it to networks from the ESPN juggernaut down to the obscure Syfy channel so they can afford to create more content.

The problem is, Time Warner, AT&T, Verizon and the rest only see their value in the first option, which is why they ruthlessly protect access to TV content. It’s why the only way to legally watch the content you pay for is through your cable box on your TV.

But the TV content market isn’t likely to be disputed soon because it’s where the content people want lives, and it’s tied up in contracts. The cable companies are still the gatekeepers to the content, and if they want to stay relevant they need to adapt to a multi-device world.

There is no reason1 that my big ugly Cable Box/DVR and TV need to be the hub of accessing the content I’m legally paying for. There’s a clear progression of technology I’d love to see Verizon, or even the new entrant, Google add to their arsenal of TV watching:

  1. Build in slingbox-like functionality to your cable box. Allow me to stream my cable box’s output to any device, so I could watch a program recorded on my DVR or live TV.
  2. Move the DVR to the cloud. Keep a copy of every TV show available immediately to consumers. Is it 15 minutes in to tonight’s Modern Family and I forgot to record it? It’s ok, I can just start streaming it live from the cloud from the start. The DVR shouldn’t need a Hard Drive any more.
  3. Give me apps on all my devices (iOS, Android, Mac, Windows) to watch those live streamed or cloud-based shows.
  4. Go ahead and show me all the commercials that would be shown in my area. It boggles my mind that something like knows where I live, yet still won’t make me another eyeball to my local commercials.

Half the value that services like Netflix and Hulu+ provide is access to the content wherever and whenever. I can grab my iPad in bed in the middle of the night and start streaming this week’s episode of Modern Family at 3am, which is how people would prefer to watch TV these days.

So why are cable companies letting the value of access to content be shifted back to services like MLB’s At Bat? To stay relevant, Verizon, Comcast, and the rest of the gang need to realize that they aren’t just a conduit for displaying content on your TV, they are the “socialist” (as Ben put it) that gives everyone access to the content they want, where and when they want, for a monthly fee.

There are two paths to success in any industry: protectionism and adding value. As the market for Music showed us, adding value in making it easy to pay for and access content is what saved music from piracy. Cable companies need to stop protecting their content, and give paying customers access to TV.

  1. Unless it’s a legal one I’m not aware of []
May 30, 2013