Cutting The Cable

6 11 2010

Remember when the music industry got a wake-up call from all the file sharers? Even though many of the illegal sites are now shuttered, there is no disputing that iTunes alone has killed the record industry (2010 iTunes sales are set to surpass sales of all CDs, for the first time in history). And remember when Netflix starting pounding the nails in Blockbuster’s coffin because no one really needed to run down to the corner store to a rent a movie anymore? Yeah, thought so.

And now it’s the cable and satellite TV providers who are nervous. Anxious. Scared to death that yet another paradigm shift is occurring, and they are about to head down to the tar pit of extinction.

We are cutting the cable.

Given the ease and low cost (if any) of watching movies and TV shows online these days (thank you, Netflix and Hulu), an increasing number of families is finding it makes no sense to pay hefty monthly fees for cable or satellite access. If you can (or even care to) receive local channels over the air, and don’t mind not being able to Watch CNN or The Weather Channel live, it is becoming increasingly tempting to just ditch cable and satellite.

This morning I just watched the most recent episode of Bones over at Hulu. Free of charge. Awesome clarity. Only a handful of commercials.

It truly does not get better than this.

And that, my friends, is why Comcast, Suddenlink, et al, are scared to death. It’s not that they are being disintermediated. No, they are simply being replaced. As in lost their relevance. What is the point in subscribing to expensive cable packages when you can get nearly everything for a pittance in comparison?

Given the relative ubiquity of broadband, it really was only a matter of time that this happened. The CDs introduced in 1982 were but a precursor to the copying that started occurring in the late-90s and early 2000s when computers with CD burners became commonplace. And you know how the industry tailspinned after that.

Heck, even the fabulously successful iTunes is facing a threat from music listening services like Rhapsody and MOG, where for $10 a month you can listen to whatever you please, whenever. What’s the point in paying $1.29 per song when ownership is a moot point?

Laurels are not for resting on, especially in this rapidly changing marketplace.

Time-Warner lost 155,000 customers in 3Q 2010, while Comcast lost 275,000. Ironically, their mood is one of denial. It’s the economy, stupid. Can’t you see that people are cutting back?

Yeah. And switching vendors.

If cable and satellite providers were smart, they’d start looking into how they are going to survive in the long run. Because I understand there is plenty of room left in the tar pit. Right beside Blockbuster.

Dr “No More Ties That Bind” Gerlich




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