The Washington Post quotes me today in a story about “cord-cutting.” This is a term used by cable companies to refer to people canceling their cable TV subscriptions and watching their favorite shows through the Internet. This could cost the cable companies a lot of money in cable TV subscriptions.
Cord-cutting is enabled, some think, by people being able to watch TV through devices like AppleTV and Roku, which rely on Internet connections to stream high-quality video onto a big screen in the living room.
The story quotes some of my views and links to a paper I wrote on the topic:
Marvin Ammori, a consumer advocate and professor of communications law at the University of Nebraska, said that even though better content options are available today, cable and telecom firms will be loath to make the best content available online for free. Content firms aren’t getting as much advertising revenue online as they are through fees and advertising from cable firms.
And, in a paper he wrote about “TV Everywhere,” a cable industry strategy to offer content only to broadband and cable subscribers, Ammori said consumers will be reluctant to take up new offerings online.
I have two more thoughts on the day’s news.
First, I think the deal between Hulu (which provides TV content online) and Roku (an inexpensive device allowing you to watch it on your TV) will be good for consumers, whether or not it leads to cord-cutting.
Second, I should note that, whatever the real threat of cord-cutting, cable companies have been frightened of cord-cutting since the dawn of high-speed Internet services. Time Warner Cable’s CEO made this point recently:
He also noted that Time Warner Cable is not just turning a blind eye to the threat posed by cord cutting. “History is full of corporate managements who were living high on the hog and something came … and they didn’t see it, and all the sudden the world changed,” he said. “We are not in that mode; we pay a lot of attention to this. In fact, pretty much from the day we launched broadband, which is in 1996, we’ve been focused on: ‘Would this become a way that video was transmitted?'”
If that sounds like yesterday’s technology fearing disruptive innovators, that’s what it is. But, f Time Warner Cable responds by innovating in its own right, rather than engaging in anti-competitive actions, consumers would be better off. And I’m guessing, so would Time Warner Cable.