The Holiday Season of Internet TV. Time to Cancel Your Cable Subscription

This holiday season is shaping up to be the season of Internet TV.  Finally the time has come for Americans to watch TV through the Internet, and not just on laptop screens but on living room flat panel HD TV screens .  Devices and services like AppleTV, Roku, Boxee, and Netflix let you watch popular movies and TV shows directly on your TV screen.  To the delight of TV viewers but the annoyance of cable companies, it is time for many Americans to give themselves or loved ones a long-hoped-for gift.  For them, it  its time to cancel their ever-more-expensive cable subscriptions.

For decades, Americans have been forced to accept high prices and little choice for TV.  This is because of limited competition–in most areas, just a local cable monopoly, satellite, and maybe the local phone company.  But with an open Internet (and free over the air broadcasting), Americans can route around the cable gatekeepers and watch TV shows, films, and amateur video online.  And technology and content companies can go straight to users.

Americans already watch TV over the Internet. airs shows from NBC, ABC, and Fox, and has over 40 million viewers a month, more than all of Time Warner’s channels, including CNN, TBS, and TNT.  Through the Internet, you can watch BBC, CNN, and PBS.  Services like Netflix‘s revolutionary service, Amazon VOD, iTunes, and the announced Sony Online are proliferating.  Through Miro, an open sourced free application, you can watch hundreds of channels.   You could also watch, or soon watch, Youtube, Vimeo, Babelgum, Rowdy Orbit, My Damn Channel, Funny Or Die, Vuze, and Roku box’s ten-channel service. and other outlets.  (Hoping to get some recommendations in the comments…)  And software like Boxee (which is free) can make all this easy and convenient.

Taking it one step further, Americans can watch any of these services on their television screens.  Look at this Netflix page listing some of the devices supporting Netflix’s Internet delivery of movies and shows to your TV.  Internet access is being built directly into Wi-Fi enabled flatscreen televisions from Vizio and Sony Bravia, BluRay players, gaming consoles like the Sony Playstation and Xbox, and online TV boxes like AppleTV and Roku.

Some of these devices and services are already in millions of family’s homes  for other reasons–like video games and HD DVDs.  Otherwise, they pay for themselves–if a customer cancels the monthly cable TV bill, that  saves many hundreds of dollars each year.  That comes in handy any time, not just holiday season.

This.  Is.  Awesome.

And it’s probably why more than one-in-three Americans is considering cutting the cord on cable TV in the next five years

But for cable companies like Comcast, Time Warner Cable, and Cox, this is  … not awesome.

Cable companies would rather you not cancel your cable TV subscription and “that you pay them 70 bucks a month for maybe a lot of channels you don’t use.”  And they are used to owning your living room television.

So cable companies are beginning to sour like the Grinch.  The two largest cable companies, Comcast and Time Warner Cable, have been pressuring TV programming networks to keep their shows off the Internet.

Comcast’s COO told the New York Times that Comcast needs a model to protected its “core business,” so the Internet is not a “destroyer of wealth.” While NBC was renegotiating its carrier deal with Comcast, Hulu’s content partners (including NBC) asked Hulu to block access for Boxee users, as Boxee lets users watch Hulu on their TV screens.

In fact, the Comcast-NBC merger has been called  “a defensive move to some extent by Comcast,” as “Comcast is eager to diversify its holdings amid an encroaching threat from online video” and other sources.

Time Warner Cable’s CEO has even said, “Guess what? We do mind,” that networks put their shows online for free; and if networks continue putting shows online “we have to intervene at some point.”

So consumers want their online TV.  They want to watch shows through any device at any time, and are willing to pay for it. And innovative competition is beginning to meet that demand.  Cable companies don’t want the competition.  And they’ve had a questionable history in their dealings with online TV competition–including a major net neutrality violation.

Considering the cable companies’ reactions, policymakers in Washington should monitor the cable companies’ response to the threat of online TV.  For the sake of millions of Americans this holiday season, policymakers should make sure online TV can compete fairly with cable TV.  This way, thanks to DC, Americans could buy and use new TV services.  And, if they wish, to cancel old ones and ring in the New Year cable-free.

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