creative deconstruction

Cable on its way to Becoming Obsolete

Posted on 02. Apr, 2009 by refe in INNOVATION

The cable industry’s annual trade convention is going on this week, and the big topic of discussion this year is the Internet. According to yesterday’s article in the Chicago Tribune, Cable has watched the Music and Newspaper industries struggle to adapt to the digital world, and there has been a lot of talk about how to avoid their mistakes.

“Cable TV companies will have to do something in between the approaches taken by the music industry — which ignored the threat of the Internet for too long — and the newspaper industry, which put its content online for free.”

Unfortunately, it sounds like they are already repeating the biggest mistake of all – regarding the Internet as a threat instead of an opportunity.

Let’s face it – traditional cable television is on its way out. Why would anyone want cable if they could have high-quality video programming online? With cable you are stuck at your house, forced to watch according to a schedule set by the channel. Online programming can be taken anywhere, and watched according to the individuals schedule. The Internet is superior to cable television in just about every way, and will only become more so as network speeds improve.

My proposal: Give customers everything in one place – online. Most (if not all) cable providers already offer broadband internet through the same cable as the TV content. So, why do households need both services? This would allow them to get rid of schedules and instead provide a kind of network hub where users can access whatever content they want. Combine cable TV content with web functionality and Viola! – a vastly improved user experience and a whole lot of happy customers.

The question becomes, how do we pay for all of this? Well, if you’ve read my previous posts you know my position on free as it relates to music. Cable TV is a little different, though, because it is has always been designed to be a premium service. Network TV is free for everyone, Cable TV requires a subscription. That’s the way it has always been, and I see no problem with this. If someone doesn’t want the extra content that Cable offers, they can stick with the free Network channels. The same could easily be true online.

Yet, even if the subscription model is retained, the Internet offers a unique opportunity to also offer free content. Let some content sit outside of the ‘walled garden’ (the name being used by some to describe the subscriber-only sections of the sites) so that casual viewers can get a taste for what Cable has to offer. This way, content can be used to promote the premium services.

None of these ideas are revolutionary, but if the Cable providers don’t do something soon someone else will do it first. If that happens, companies like Comcast and Time Warner will have a hard time recovering.

Tags: business, business models, cable, creative deconstruction, economics, INNOVATION