The TV Business May Be Starting To Collapse

[Kadarin]

I canceled my Comcast cable several years ago, and haven't missed it. Now it's iTunes and Netflix.. So what if I can't watch Game of Thrones season 2 until HBO releases it? I can wait.

 

[BoberFett]

Good riddance.

 

[DrPizza]

Cable companies have gotten away with being greedy for so many years, I really don't feel sorry for them.

Do you even understand the business cycle of tv?

Cable charges a rate.
From that rate, they pay the networks their rate, their costs and make a profit.
From the networks rate, they pay the productions companies their rate, their costs and make a profit.
From the production companies, they pay the shows cast a crew their union rate, their costs and make a profit.

So, out of the charge you receive, Cable company makes money, network makes money, production company makes money, and the union members (actor's guild, screen writing guild and various crew unions) make money.

All he misses is they're ALL greedy. Eventually, the world is going to realize that these sports stars aren't really worth 100 million dollar salaries, stars (cast members) of sitcoms aren't worth 10's of millions of dollars, etc. But, they demand more money, the owners demand more money, the networks demand more money, then we the consumers, with no choices BUT to get all of those channels, are forced to pay $100 a month for next to nothing.

edit: oh darn it, and then I see two or three replies later that you also realize this. 🙂

 

[SMOGZINN]

... as cable companies start losing revenue on cable, they'll just set up metered tiers for data usage such that you'll pay through the nose to consume tv through the net.

This is a real problem, and the reason that very strong net neutrality laws is need. As their old business model starts to fail they will prop it up with unfair business practices since they control both the content and the means of delivery.

 

[woolfe9999]

All he misses is they're ALL greedy. Eventually, the world is going to realize that these sports stars aren't really worth 100 million dollar salaries, stars (cast members) of sitcoms aren't worth 10's of millions of dollars, etc. But, they demand more money, the owners demand more money, the networks demand more money, then we the consumers, with no choices BUT to get all of those channels, are forced to pay $100 a month for next to nothing.

What again are we "forced" to pay for? Look, these people are getting paid what the market will bear, because we are willing to pay that much. Maybe at some point we decide we aren't willing to pay that much, in which case these people will make less. But in order to do that, we have to demonstrate that we're willing to go without something because it's too expensive. So far it seems Americans are still obsessed with TV, in whatever form they can get it in. Tomorrow that may be predominantly over the internet, but we're still going to pay and there's no reason to think we'll pay less.

 

[Lemon law]

Not if you have ethics. I pay for my content instead of "infringing" it.

If I like a show enough to spend my time watching it, the creators and distributors deserve to get their piece of Netflix license money or Amazon per-episode fees.

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You have a false argument here DaveS, if my local over the air television station offers me free content in exchange for watching maybe annoying commercials, how do I "infringe" anything?

The only one getting their rights "infringed" is you Dave, as your local pay for TV provider may sell you content you want, but then also asks you to watch the same annoying commercials too.

As you also ignore something else, it does not boil down to a choice to having either pay TV or over the air free TV, when you can have both. After all, if I only get a subset of my local OTA channels from pay TV, and have to pay extra to get them to them to boot, any idiot can figure out that is stupid. As its cheaper to have both options available to you, me, and everyone else.

 

[BoberFett]

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You have a false argument here DaveS, if my local over the air television station offers me free content in exchange for watching maybe annoying commercials, how do I "infringe" anything?

The only one getting their rights "infringed" is you Dave, as your local pay for TV provider may sell you content you want, but then also asks you to watch the same annoying commercials too.

As you also ignore something else, it does not boil down to a choice to having either pay TV or over the air free TV, when you can have both. After all, if I only get a subset of my local OTA channels from pay TV, and have to pay extra to get them to them to boot, any idiot can figure out that is stupid. As its cheaper to have both options available to you, me, and everyone else.

The person he was replying to advocate downloading things for free through Usenet. You should learn to read.

 

[Michael]

Since we moved to Shanghai about a year ago, the family has greatly changed TV watching habits. Almost everything we watch now is via iTunes (at least the production companies get paid there), Netflix or free streaming from the different network websites.

Michael

 

[Ronstang]

Do you even understand the business cycle of tv?

Cable charges a rate.
From that rate, they pay the networks their rate, their costs and make a profit.
From the networks rate, they pay the productions companies their rate, their costs and make a profit.
From the production companies, they pay the shows cast a crew their union rate, their costs and make a profit.

So, out of the charge you receive, Cable company makes money, network makes money, production company makes money, and the union members (actor's guild, screen writing guild and various crew unions) make money.

I completely understand the business model. The problem lies in the fact that the cable company makes me subscribe to about 100 channels to get the 7-8 I actually care about and thus I am forced to pay all that profit to all those people who do shit I cannot stand because the stations are stupid.

They need to break the sports channels out of cable and make the sports fools pay for what they want. I do not like sports and I do not watch them but I am paying for them so the schlep next door doesn't have to pay as much for what he wants.

It is about time for building and paying for you own channel line up. If ESPN goes tits up because of it then so be it. Either that or the sports guys need to be willing to pay for what they want each month.

I can hardly find ANYTHING on TV to watch anymore. The only reason I still have cable is because it is the only option for watching the few channels I truly do enjoy.

 

[Fern]

Interesting article. But it leaves me wondering just what is meant by the term "the TV business".

And I don't like the analogy to the newspaper business. The newspapers were just a medium for delivering the product (news, editorials etc.). The business of "news" is going quite strong, it's just that few want it delivered in paper form.

So, again, what is the "TV business"?

If they mean the content, I don't see that going out of favor. As it always has, it will change to suit peoples' preference. And how it's distributed will (continue to) change etc. But the content is going to remain in demand IMO.

The networks? That's been under change for a long while now. I remember when there were just 3 networks. I suppose they were originally called "networks" because of the network of OTA broadcasters needed for distribution. But heck, that changed long ago with the arrival of cable. How many "networks" do we have now? A bazillion?

What is a network now? I now realize I don't think in terms of networks anymore. I think in terms of "channels". If this article is forecasting the eventual demise of networks, I'd say he's way late with that news. With cable and satellite the networks are long gone and we're left with "channels".

So, what about channels? Will they change or disappear? As it is now I don't see them as much different than "libraries" anyway. Yeah, they produce or buy their content according to their branding (Discovery, ESPN, History, Fox etc.) and offer it to us on their schedule. The latter will change, but I don't see that as any challenge to the "TV business".

The author speaks quite a bit about advertisements. I can see that changing quite a bit and therefore a challenge to the TV business. But they are going to get their money, even if they charge us per show/episode/sports match, because I think we'll continue wanting that content. So, yeah, it's likely the revenue model will have to adapt, but I don't see any insurmountable challenge to the TV business.

Cable or satellite TV companies? I don't see them going anywhere far anytime soon. The content has to be delivered to peoples' homes somehow, and as of now that's all we've got. Even if it's not content they assemble and package, you're still going to pay for their pipeline.

I suppose if you're an investor in one of the media companies that owns TV networks/channels you'll need to watch how they adapt to changes. Just as Blockbuster went bankrupt for failing to adapt, so could some of these media companies. But that doesn't mean the video rental business died, it just changed distribution of content a bit.

I guess to me the "TV business" means watching video content for entertainment or news. I don't see that disappearing or collapsing. And I don't see those producing popular content, whether they be actors or writers etc, being forced to accept less money. I think producing/making popular content is going to pay extremely well if only because the population (consumers) is always growing and the distribution is extremely cheap and efficient. You can make one movie or show and deliver it to a billion people. Try doing that with a fvcking widget.

Fern

 

[DaveSimmons]

For the nerds here: Usenet + Sabnzbd + Sickbeard = no need for TV 😛

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You have a false argument here DaveS, if my local over the air television station offers me free content in exchange for watching maybe annoying commercials, how do I "infringe" anything?

The only one getting their rights "infringed" is you Dave, as your local pay for TV provider may sell you content you want, but then also asks you to watch the same annoying commercials too. ....

As BoberFett noted, usenet downloading is not over the air television.

 

[K1052]

Cable or satellite TV companies? I don't see them going anywhere far anytime soon. The content has to be delivered to peoples' homes somehow, and as of now that's all we've got. Even if it's not content they assemble and package, you're still going to pay for their pipeline.

I suppose if you're an investor in one of the media companies that owns TV networks/channels you'll need to watch how they adapt to changes. Just as Blockbuster went bankrupt for failing to adapt, so could some of these media companies. But that doesn't mean the video rental business died, it just changed distribution of content a bit.

As soon as agnostic devices start showing up that can stream live channels on an a la carte basis from any network connection the jig is up for traditional Cable/Sat programming as a profitable business. Content creators will beat the delivery pricing down to maximize profit and everyone else will just be in the internet access business. Comcast most definitely sees the writing on the wall which is why they bought NBC/Universal to get at the content end.

Assuming Apple releases such a device in the next couple years and the ensuing war between them, Google, and Samsung explodes like it has in other tech markets I think it is entirely likely that packaged TV as we know it now will be all but extinct before the end of the decade.

 

[SMOGZINN]

As soon as agnostic devices start showing up that can stream live channels on an a la carte basis from any network connection the jig is up for traditional Cable/Sat programming as a profitable business. Content creators will beat the delivery pricing down to maximize profit and everyone else will just be in the internet access business. Comcast most definitely sees the writing on the wall which is why they bought NBC/Universal to get at the content end.

Assuming Apple releases such a device in the next couple years and the ensuing war between them, Google, and Samsung explodes like it has in other tech markets I think it is entirely likely that packaged TV as we know it now will be all but extinct before the end of the decade.

Unless of course ISP's that have a heavy stake in packaged TV like Time Warner and Comcast decide to tell people that 10% of their users are taking up 90% of the bandwidth and set restrictive data caps that are intended to prevent you from using those services.

But, that would never happen.

 

[Bitek]

I've been cable free for ~8yrs and don't miss a bit. OTA/Netflix/and PC brings in plently of content. Shouldn't dismiss the role of youtube also.

The upside is I rarely ever see commercials. So no goddam political ads or other useless adverts.

Downside is I really don't know what is playing the the theaters unless I make an effort to look. Makes it a PITA to find good stuff on netflix (irony).

I wish HBOGO didn't require a cable sub. Completely backwards and bullshit. Why would I want to watch it on a small screen over a 3G connection when I have it in full HD @ home on a nice HDTV? I'd buy some shows PPV. Hope they remove head from ass.

 

[rchiu]

Is this news? Cable companies has known this for a long time, and that's why they are into the Internet content business already.

 

[K1052]

Unless of course ISP's that have a heavy stake in packaged TV like Time Warner and Comcast decide to tell people that 10% of their users are taking up 90% of the bandwidth and set restrictive data caps that are intended to prevent you from using those services.

But, that would never happen.

That might delay it slightly but other providers will see the opening and fill the void. ATT/Verizon and some of the lower tier cable operators at first then probably lots of other companies that own infrastructure not yet used for this purpose.

 

[PokerGuy]

For the nerds here: Usenet + Sabnzbd + Sickbeard = no need for TV 😛

:thumbsup::thumbsup::thumbsup::thumbsup::thumbsup:

That's my setup, no need for any cable tv package. The only issue will be when the metered tiers start making your internet use expensive.

 

[sportage]

Ok... What were you saying again? A commercial just came on.

 

[PokerGuy]

They need to break the sports channels out of cable and make the sports fools pay for what they want. I do not like sports and I do not watch them but I am paying for them so the schlep next door doesn't have to pay as much for what he wants.

I think you're off on that one. Sports programming is by far the most profitable programming because it's one of the few remaining types of programming where the vast majority of viewers watch it live including the commercials. If it it wasn't for sports, you'd likely be paying a lot MORE for your channels. I don't think you're subsidizing the sports channels, its the sports channels that subsidize other channels.

I agree with you on the a-la-carte system though, that makes a lot more sense to me. Pay for what you want. The 'vendor' (content provider) can set a price, and the consumer can decide if they want to pay that amount to see the content. No complicated "packages" needed or wanted.

 

[PokerGuy]

This is a real problem, and the reason that very strong net neutrality laws is need. As their old business model starts to fail they will prop it up with unfair business practices since they control both the content and the means of delivery.

Net neutrality will not change anything in this regard. ISP's will simply charge based on usage, so if you watch a lot of stuff online or download movies etc, you'll pay for that usage. I believe in the need for net neutrality because I don't want my ISP deciding what stuff gets prioritized and what doesn't, but we're going to pay for bandwidth anyway.

 

[Nebor]

For the nerds here: Usenet + Sabnzbd + Sickbeard = no need for TV 😛

:thumbsup::thumbsup::thumbsup::thumbsup::thumbsup:

That's my setup, no need for any cable tv package. The only issue will be when the metered tiers start making your internet use expensive.

I agree with you on the a-la-carte system though, that makes a lot more sense to me. Pay for what you want. The 'vendor' (content provider) can set a price, and the consumer can decide if they want to pay that amount to see the content. No complicated "packages" needed or wanted.

When do you expect you'll start paying for those things you want?

 

[michal1980]

problem with TV business dieing is that alot of programing will die with it.

If no one watches commericals, and that ad revenue dies you either have to pay alot more per episode/show to support its production, or the show will never get made.

 

[sm625]

I havent paid for a monthly cable bill for 6 years. Before that I had basic cable because it was only $5 more. I finally cancelled it because it wasnt even worth $5. I havent seen more than one or two tv ads in a single week since the super bowl. If you've seen the series finale of V 2009, then you will understand when I say "That crap is like Bliss".

If you dont subject yourself to the "programming" for a long period of time, you can begin to see its effects on people... It is very very similar to the behavior of the people at the end of the V (2009) tv series. Especially when major events occur. (Like a 9/11, or the contrived leadup to the Iraq wars) That is when you really see people's programming take hold of them.

If tv and its advertising are truly dying then the elite must figure they have the population so locked down that they dont even need it anymore.

 

[PokerGuy]

When do you expect you'll start paying for those things you want?

I already pay for them, I pay for cable so I can watch sports. I use the usenet/sabnzbd/sickbeard combo to watch all the shows without pesky commercials and on my schedule. Nice try though, you can put away your "jumping to conclusions" mat again 😉

 

[PokerGuy]

problem with TV business dieing is that alot of programing will die with it.

If no one watches commericals, and that ad revenue dies you either have to pay alot more per episode/show to support its production, or the show will never get made.

I don't have a problem with that though, let the market decide what is (or is not) worth paying for and watching. If I need to pay $10 per month to get ESPN, I'll do it. If I need to pay $60 to get ESPN, I won't. Channels that don't get enough subscribers should go away just like magazines that don't get enough subscribers.