Cable Television: An industry that thinks it’s selling entertainment, but it’s not.

Most consumers don’t want or watch 189 cable TV channels. In fact, the average American only watches 17.5 of those channels. Still, according to a new report from Nielsen, 189 is the average number of channels the average American television household receives.


Because it is how the cable companies as distributors, make money. They make money from the consumers and producers of all of those channels as the aggregator and distributor. And up till recently, they’ve had a monopoly in doing so.

Consumers on the other hand, want to pay for what they use. More and more Americans are untethering themselves from the Comcast, Time Warner and Charter cable box, and turning their homes into “zero cable households” reliant on the Internet for their “television” entertainment.

The Cable industry as a massive monopoly for home entertainment is sure to be broken by consumer demand and disruptive change in the near future. Like other outdated and gluttonous industries before it, the cable industry will be crushed and Americans will get unbundled access to the programming they desire. As zero-cable households grow, and innovative entrepreneurs imaging new businesses untethered by the way things used to be, it is inevitable that they will break the monopoly of the cable industry eventually. It is only a matter of time before the new Hulu, or Netflix, or Amazon, or HBO, unlocks the code to the media industry and give consumers what they want.

Don’t believe that the cable industry as we know it will cease to exist? Think they are too powerful and ingrained in our existence?

Consider the recent and seemingly sudden shift in the music industry—another blotted, gluttonous and outdated industry that has been crushed by consumer demand for music when and where they want it. Set afire by the industry provocateur Napster—that innovative and disruptive company that allowed free digital downloads of music, the music industry is now only a shadow of its former self. The New York Times reports that last year the recording industry was a mere 40% of its size in 1999. That’s a 60% downsizing of a massive industry in less than 15 years. James L. McQuivey from Forrester Research is quoted explaining the industry’s reshaping in a freshly eloquent way: “The industry thought it was selling music; it was really selling physical objects containing music—CD’s—and it wasn’t prepared for people buying fewer of them.”

So, apply that to the cable industry which may think it is selling films and television programming, but in reality, they are simply selling the pipes to your television set—which can now be controlled by the Internet which clearly understands its place in the world as a free distribution vehicle—not the creator or content.

So far, the Netflix and Hulu and Amazon models have not yet crushed the cable industry, but we are surely will see them appear—just as Napster was crushed, and beget iTunes, and Soundcloud and the lot.

Viva la consumer, and so-long to the old bloated industries of old.

cable television as text on vintage metal manhole image courtesy of Shutterstock

blog comments powered by Disqus

The Featured Five