TV, Cable Companies Convincing Themselves People Don't Want To Cut The Cable

from the the-self-delusion-of-the-damned dept

There’s a NY Times article that appears to have a bunch of cable & TV companies congratulating themselves for beating the internet in getting people to keep paying high monthly premiums to get premium TV channels on their TV, rather than using some of the various internet solutions out there. Like so many awful NY Times “trend” pieces these days, it appears to key off of a single anecdote of one guy who tried to ditch cable, and then went back after a year. How many people are actually doing this? No idea. It’s not like the reporters at the NY Times tell us. They do tell us that not too many people have dropped cable, but that’s hardly surprising. What’s much more amusing is the suggestion that the cable and TV companies have somehow “beat” the internet by restricting content:

In part that is because the television business took action to avoid the same fate. Heavyweight distributors and producers have protected their business models by ensuring that some must-see shows and live sporting events cannot legally be seen online.

Legally. Yes. But, just wait until you see what that enables on the less-than-legal side of the internet. As for the fact that people aren’t dropping cable yet, this all really sounds like the cable companies not recognizing how trends accelerate. They do, indeed, start slow, and as Clayton Christensen has noted for years, the incumbents don’t pay attention early on, because the other solutions just don’t seem as good. And… here in the NY Times article we get:

Technology companies are pushing alternatives like Web-connected set-top boxes. But these are still not as easy as signing up for cable or satellite service, particularly for those who want to watch on a big flat-screen TV and not a computer.

Classic innovator’s dilemma statement. It’s certainly true that, right now, it’s not as easy to use these internet services as it is to sign up for cable, but it’s getting easier all the time, and sooner or later, someone is going to create a breakthrough service that makes it really easy. We’ve seen it time and time again. Napster did it for music file sharing after we were told that people didn’t want music online. Vonage did it for VoIP after telcos insisted that VoIP quality would never sell. Who knows who it will be, or when, but someone will figure it out, and then we’ll see the cable and TV companies freak out, because the cable cutters will shift into high gear.

This is the problem we were discussing recently, where disrupted companies simply don’t recognize the speed at which a disruptive offering catches on when it does finally catch on. They think that they’re successfully “protecting” their existing business with things like Hulu’s subscription plans, but that will cause them to miss the truly disruptive innovation.

At least the NY Times article hints at the growing undercurrent, in noting that the younger generation is four times as likely to go without a cable subscription. That number is just going to grow, and as new offerings come along that make it easier and easier to get what you want, when you want it, without silly restrictions, the idea that the legacy guys “beat” the internet by restricting access to content will seem laughable.

Update: And look… just as this is published, out comes the news that cable TV has suffered its first ever decline in subscribers. Nice work, NY Times, in pitching a whole story based on a single anecdote, about how cable has nothing to fear… just as the numbers come out to show that people are, in fact, cutting back on cable subscriptions. I’m sure stories like this will make the upcoming NY Times paywall that much more valuable.

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Comments on “TV, Cable Companies Convincing Themselves People Don't Want To Cut The Cable”

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Greevar (profile) says:

Re: And here comes Google:

I would never use that service. It’s just too much like the old way. I don’t want to record my shows when they air. Why would I do that when I could just download my shows while I sleep? I also don’t want to record a show that’s already been degraded by sending it over a transmission line and then compressed once again so it can fit on the hard drive of some digital appliance.

Anonymous Coward says:

Internet TV’s time has not came – yet.

There are just too many issues for some people with dial-up and slow DSL topping the list. Other principal issues are copyright and format.

Given that it is not supprising that some (actually most) find cable to be better than the internet for movies and non interactive content.

Greevar (profile) says:

Re: Re:

Cable is only better (at the moment) because cable is also providing roughly half of the internet service (the other half being DSL). They are intentionally keeping it anemic so they can make money on their walled garden of cable TV packages. This is the very reason we need to demand net neutrality and upgrades to our infrastructure.

fogbugzd (profile) says:

no tv in the dorm rooms

I help Freshmen move into the residence halls every year. One trend I noted a few years ago was a large number of students who did not have TV. This might have been understandable when TV sets were big and bulky, but the trend has only accelerated on my campus as flat screens became more common. And this is a situation where students connect to cable TV for free.

At home the cable TV to my son’s room was not working for weeks. I only found out when his Internet connection went out; he told me about that immediately.

Jon B. says:

I have satellite. I keep it for a few reasons:

– Live sports. Football season is starting soon.
– Turning on the tv and picking something random. It’s instantly on and I don’t have to make active decisions about what to watch. There should be an internet version of flipping channels with something ‘instantly on’.
– HD. It’s 1080p or 1080i OTA which I still don’t quite have access to instantly over the net, nor do I have the bandwidth currently.
– Multiple TVs. I just don’t have all the hardware set up for 3 set-top boxes (1 HD and 2 SD) in the house configurations to get stuff over the net easily with a remote. It could be done, though. There’s definitely not an easy out-of-the-box solution, but the pieces could be cobbled together. I have a PS3 in the living room and a PC with a media server on it, but that only works for one TV.

Those reasons will fade with time. Providers need to get on board now to build cheap off-the-shelf solutions to those issues before someone else does.

Greevar (profile) says:

Re: Re:

“There should be an internet version of flipping channels with something ‘instantly on’.”

If you have a fast broadband connection and a suitable HTPC, you can just leave it on over night to download your shows so you have a collection of shows waiting to be watched. Then you can just look at your list of shows and pick one at random. Besides that, there’s still streaming video and it’s possible to make it work like that. Personally, I don’t see the inability of “surfing” to be much of a loss when you gain so much with the internet.

Hulser (profile) says:

Re: Re: Re:

Personally, I don’t see the inability of “surfing” to be much of a loss when you gain so much with the internet.

I disagree. One of the pleasures of TV in general, and surfing in particular, is the passivity. After a hard day at the office, you don’t want to think any more, not even to select a particular show from a list of your favorites. Sometimes you just want to turn the TV on and veg.

That’s why I think that, in the age of Internet TV, the role of surfing will be met by a “what’s playing” stream, much like what you’d see when you turn the TV on at a hotel. You can sit on your couch after work and watch a compilation of brief snippets about what shows are available for that particular “channel”. If you see something you like, hit the Watch button and you’re set.

BoloMKXXVIII (profile) says:

Re: Re: Re: Re:

Clicker and Youtube are both creating a passive alternative. They learn what types of videos you like and stream them one after another to you.

The only problem I see with IPTV is it is still fragmented. I want to be able to move from Clicker to Miro to Netflix to OTA with one button press. It will happen in time. IPTV is still in it’s infancy.

PS: I dropped cable almost a year ago. Comcast compressed the signal so much even a Hulu video looked better.

The Devil's Coachman (profile) says:

Re: Re: Re: Turning TV on and vegging out is a commendable trait?

Funny, but most people in this country seem to be fond of turning on the TV and vegging on the couch, becoming a form of veg themselves – sofa spud. For that reason, coupled with the steady diet of carb and fat-laden swill while doing so, we have become a nation of Weebles, most of whom seem to shop at Walmart in the junk food and plus-size clothing aisles. Frankly, I doubt that what you do for a hard day at the office requires thinking much, because if you find it so taxing, I don’t believe your brain has enough energy to do it for more than a minute or two at a time.

Daniel Bullington (user link) says:

DTV over UHF Array

I have been CATV free for three years and never looked back. I live in an area serviced with Cox digital cable and I was so displeased with the compression on HDTV channels. I setup a ChennelMaster UHF array and amp on my roof (in a subdivision) and get crystal clear, free DTV the way it was designed. I still have cable internet and cable phone, but I save $100 a month on CATV. I use Netflix DVD and Instant for movies and TV shows, plus the major networks stream show a day after first run. CATV companies need to ditch the CATV completely and do pure on demand over Internet…thats the wave of the future.

Hephaestus (profile) says:

Re: DTV over UHF Array

“CATV companies need to ditch the CATV completely and do pure on demand over Internet…thats the wave of the future.”

They are to short sighted to do this, it would cannibalize there existing business and force them to upgrade their network to run at higher bandwidth. A big problem with living quarter to quarter and having no competition is you end of with a frozen bureaucracy that can’t compete and unwilling to spend money on upgrades. FIOS is going to win out big over the next few years because of this.

Hephaestus (profile) says:

“This is the problem we were discussing recently, where disrupted companies simply don’t recognize the speed at which a disruptive offering catches on when it does finally catch on.”

I have been researching disruptive technologies for a while now. It started with the phrase technological singularity and grew outward. Here is a prediction, the cable companies will, with in the next year, begin seeing a reduction in the number of people subscribing to their services. People will use online services like Hulu, netflix, bit torrent, p2p, etc. Their predictions of their customer losses will be wrong and will happen twice as fast as they predict.

This is one of the reasons I want to see the Comcast-NBCU merger go through it will accelerate the failure of comcast.

Hephaestus (profile) says:

Re: Re: Re:

I dont think the cable companies are getting in bed with RIAA, I think they are fighting a delaying campaign. Doing the whole “we agree with this in principle but several details need to be worked out. Lets get together again in 3 months after we run this by legal … ” Its what I would do to push the decision off into the future, avoid any legal repercussions, and keep out of the sights of the FCC.

R. Miles (profile) says:

Just an observation.

“someone is going to create a breakthrough service that makes it really easy.”
Someone did. His name is Tim Berners-Lee and is credited as the Father of the Internet.

The connectivity to the PC and television has been around for several years now.

The only reason people aren’t doing it is because it’s the content providers pulling their plug.

Anonymous Coward says:

Why people need cable seriously?

The only time I had cable was when the building I was living in had that included in the rent.

But someday I’m going mobile.

It is like living in your own spaceship, ok I’m a SF fan.
I guarantee you, cable connections are not in the plans for that.

Anonymous Coward says:

Its cheaper for me to have basic cable and internet, than internet by itself. I haven’t had cable hooked to a tv in 2.5 years, yet im sure they record me as a cable tv subscriber. They are just padding their stats so their investors think everything is well in cable-land.

Besides things like on-demand and their ilk are just streaming video internet with horrendous lag, and crappy controls.

dom says:

I tried a little of Internet tv and my 1st issue is my Internet bandwith allowance. I can’t watch like an hour of tv on Internet and keep my data usage under my ISP max bandwith allowed (6gig up/down). If I go to higher Internet plan, than I pay more on Internet to pay less on cable….that just switch the pocket but pay about the same at the end and lost live hockey game and stuff like that.
When Internet data plan get cheaper, I will try again this for sure. One day all services will come on one cable and I bet the services used for that will be Internet. Providers will change pricing but at the end, I’m sure they will get a way to keep getting about the same money from your pocket 🙁

Nick says:

Disingenuously inflated numbers?

Could the reason that “not too many people have dropped cable” be due to simply not being able to NOT get a cable tv subscription? Where I live I don’t have many ISP choices (surprise surprise). So I am with Comcast. The messed up thing is that if I want to get high-speed internet service without a television package, it’s actually MORE expensive than just getting the most basic of television services included. So I do have a cable subscription, but I rarely use it. How many of the people in their “analysis” are people like me?

out_of_the_blue says:

Large numbers of lazy people want mindless diversion.

Don’t count conventional TV as dying just yet. And so long as *most* of the bandwidth (cable or satellite) goes to video, the internet possibilities are limited. Besides that, the “one button” integration doesn’t seem possible over the internet — assuming licensed popular “mainstream” content — while the more advanced will seek diverse sources, but any one of which are never large enough to achieve *easy* access.

By the way, I doubt that the internet is going to pan out as “disruptive”, as argued by my header, and supported by abundant evidence. For *now* it is, but it’ll soon be just a *vaster* wasteland (a phrase originating in late 50’s).

Jim L (profile) says:

Cable Free

It’s been almost 2 years for me and I see anything that I want to watch. I have a dedicated laptop and wireless remote for it. I may be ahead of the curve, but I don’t see any chance of going the other way.

Streamed the ESPN game last night. I did have to switch channels on once, but it was no big deal. It’s a little better quality than the p2p streams and there were about 20 choices.

Quality keeps getting better all the time.

TPBer says:

Google TV

Isn’t this what the whole GTV is about. They call it a companion box, yeah right. It’s a browser based STB, running chrome. I installed a demo that dish is going to use in the fall. It requires a fast internet connex, I would say 10Mb+, it is controlled with a Logitec bluetooth mouse and keyboard.

It happened to be installed on the 24Mb connex for Uverse and worked like a champ. we just surfed the net with it, no need for any pay TV service.

JackSombra (profile) says:

Content wise the only reason to have premium paid for television (Cable/Satellite) is sports. If you have no real interest in sports, content wise there is little reason to have it with all the free/lower cost alternatives

On the other hand, technically, internet transmitted TV is not quite there, for the average Joe (you know..the types that still have problems programming a vcr) it is still very complicated and in many cases beyond them to use…even if they have someone else set it up for them

But i defiantly would not invest much in cable/Satellite companies any more, their market will continue to shrink and if/when someone solves the technical complexity of internet delivered audio/visual content they will be left with only the sports fans (and even that will not last).

Greevar (profile) says:

Re: Re:

I disagree, the reason internet TV is “not quite there” is because the ISPs have a vested interest in keeping the internet anemic enough that we remain dependent on legacy services that really don’t have any place in the world anymore. That’s why they put throughput caps on broadband services and that’s why they don’t deploy fiber to the home like they were supposed to. If they gave us the fast internet infrastructure that we paid for twenty years ago, they would lose all the profits and tax benefits their legacy services have been abusing.

ChronoFish (profile) says:

Since we're talking anecdotal evidence....

My wife and I haven’t had cable since 2001. Even with kids now we checkout DVDs form the library, and use NetFlix and Hulu.

We had a little withdrawal when broadcast TV went HD – but we still haven’t purchased a HD converter box.

I do miss the NFL – but not so much that I need to pay $1000/year for it.

We are fortunate to live where FiOS (Verizon) and Cable (Cox) compete – so we do an Internet/Phone combo – but no cable.

I’ve noticed that many of my friends have noted via Facebook that they are trying to live sans TV or sans Cable. The idea that they are even trying it should be enough to scare the Cable companies.

Also – it should be noted that the Times owns a number of TV and radio outlest – and

“On August 25, 2006 – The company acquired Baseline StudioSystems, a leading online database and research service for information on the film and television industries for $35 million.”

I’m sure that has nothing to do with the articles stance though…..

– CF

Pangolin (profile) says:

But some people need cable...

Some people need cable for their internet connection. Some can’t cut “basic cable” because they need it in order to have the internet. I lived at one place (I don’t have a TV) where I had basic cable with no TV just so I could have high speed internet. To get the internet you had to have basic cable. Now, basic cable is nearly $50.00 a month near here — NOT including internet or any “premium” content.

I don’t think cable is going away because it’s the infrastructure for the internet in many neighborhoods.

They actually benefit from the internet. If they didn’t offer internet I know a lot more people would cut the cord.

vicarious infringer says:

I cut cable years ago, it costs less for high-speed internet, and access to usenet to get unlimited ‘channels’ when/where/how I want them. Cable companies have been progressively losing customers year after year.

I have a 60″ LCD ‘monitor’ connected to my HDMI computer, and get better 1080p quality from newsgroups than I do from any ‘channel’.

Anonymous Coward says:

Re: Re:

Here’s the $10 Million dollar question:

What are the chances that customers will learn that “60 inch Computer Monitors” can function like “60-inch Televisions”?

Secondly, what are the chances that the general customer will learn this before there’s a solution that’s chartered by the Cable-TV industry?

Thirdly, How will the Cable-TV solution be enforced?

If you can answer two out of the three of these questions you can answer the third.

Rekrul says:

The show Melissa & Joey aired an hour ago, and Warehouse 13 just started on SciFi. Later tonight I’ll be downloading both in commercial-free AVI format, along with White Collar, Covert Affairs and Make It or Break It. The other day I downloaded the latest episodes of HBO’s True Blood and Hung.

I still have a cable connection, although I don’t know why I keep it. I hardly ever turn the TV on any more. I guess I’m just afraid of change, or that AT&T will institute data caps the day after I ditch cable.

Jeff Woods (profile) says:

The trend started a long time ago

I dropped cable TV in 1999. These days Netflix (discs and streaming) have completely replaced cable TV for my household, and mostly replaced broadcast TV. (I really like the 2 Roku set-top boxes I own.) News is mostly online. TechDirt, /. and Google are standard fare.

I have cable internet, but it’s business-class so it’s truly unlimited (static address, no ports blocked, no monthly caps, etc). For folks in my area with consumer-class internet from the local cable company, it’s actually cheaper (about $5 a month) to get internet service with basic cable TV than without cable TV.

Rekrul says:

Re: Re:

Does switching to AT&T U-verse from Cox constitute ditching cable?

Not if you also have their U-Verse TV service. It may be delivered via the network, but for all intents and purposes, it’s considered “cable”.

In other words, you’re paying for a TV package that includes lots of channels you’ll probably never watch, not to mention the monthly box/DVR rental fee.

Jim (user link) says:

Gotta be fair...

To be fair, SNL Kagan, the company that reported the subscriber loss, didn’t think it was due to Internet options. From the original Hollywood Reporter article:

    SNL Kagan doesn’t believe that increased availability of broadband Internet content has driven the bad quarter for TV providers.

    “Although it is tempting to point to over-the-top video as a potential culprit, we believe economic factors such as low housing formation and a high unemployment rate contributed to subscriber declines in the second quarter,” said analyst Mariam Rondeli. “We are also seeing churn resulting from the broadcast digital transition, which boosted video uptake early last year, as many have abandoned their paid subscriptions once initial promotional contracts expired.”

Techy Gal says:

Choosing a service

I did a lot of research before choosing a service provider because I wanted to make sure I was choosing a company that I would not be changing after a few months. For me I don’t care about the contract, if I don’t like the the service I’m receiving I’ll pay the cancellation free. I was with cable fro a few years and decided to switch so I started looking around into the elements that were available. I found out a lot of cool information especially after starting a career with Dish Network. First, Dish offers 3 HD receiver free and has picture in picture technology which has 30 second skip capability on their DVR’s. Secondly, they offer the lowest all-digital prices nationwide and twice as many choices as any TV provider for their programming. HD programming is free and is also way ahead of cable in the amount of choices. Lastly, the customer service I receive is fantastic, I’ve never talked to someone who does not have a good technical background and offers an empathetic perspective to the questions I am having. Dish goes above and beyond in every category.

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