Is Cable TV Tuning In Its Own Obsolescence?

Cable TV may be in for a rude awakening from the dream-like hold it has managed to keep over consumers all these years. Recent content provider disputes among DirecTV and Viacom, along with legal decisions allowing websites like Aereo to stream broadcast TV, are putting the industry’s revenue model in serious risk.

Content Wars Make Customers the Losers

Three factors are bringing this disruption to a head. First is the increasing friction between cable companies and content providers, the most recent example being DirecTV’s decision last week to drop Viacom content on its satellite TV network – a move that blocked nearly 20 million customers from up to 26 channels of content (if you count HD channels).

At issue are the ongoing fees Viacom charges DirecTV to deliver its content, centered around the issue of cable bundling. DirecTV wants to give its customers an à la carte type of arrangement for Viacom channels, so that they can buy only the channels they want. Viacom, fearing the potential loss of revenue from channels people don’t want to pay for, would like to keep the current bundles of cable channels.

Customers are increasingly demanding à