At least that's one of the visions we keep hearing from people at the intersection of television and the Web, who think that Internet distribution is going to shake up your TV experience the way it's already changed the way you get music and read news.
The idea: You'll get about 20 linear channels from cable -- a legacy broadcast network, a few big-brand cable networks like ESPN, maybe another live sports channel, some major lifestyle channels, and that's about it. The rest will be handled via video-on-demand or streamed over the Internet.
If that's what happens, the effects on the TV industry would be colossal.
Because this shift would be caused, to a great extent, by TV advertisers moving their money online, there would be a pretty big, new pool of money to pay for companies to be scrappier, online-focused production houses. But there's little chance that Internet advertising will ever be able to support the bloated production costs of most of today's cable shows -- at least on the scale they're happening today. So most channels and cable-riches-spoiled production companies would simply go out of business, replaced by more nimble upstarts. (That's what companies like Revision3 and Next New Networks are betting on.)
Meanwhile, cable providers like Comcast (CMCSA) would probably have fewer subscribers spending the same amount (or less) per month on cable TV, but they'd have much lower content costs. Right now, cable companies spend about 40% of your monthly bill on content. In a more on-demand world, where people only have to pay for what they watch -- not a bunch of channels they don't want -- that could be a little lower.
Broadband usage would go up as people watch more Internet video, suggesting that ISPs could charge more for Internet access. (Maybe even on a consumption-based billing model, but that'll be hard.) But probably at lower margins, as they have to keep adding capacity to their networks.
And a new winner: Someone will be the one that connects your TV to the Internet: Either the cable companies -- who have the advantage of a set-top box already in your living room, but the disadvantage of being slow pokes with terrible software and user interfaces -- or someone like Apple, Microsoft, Roku, or your TV manufacturer.
To be sure, this is just one hypothetical glimpse at the future. Maybe 400-channel digital cable will ride it out to infinity. But anyone in TV who's seen the music industry get gutted over the last 10 years can't be so sure about that.
Read More: THE BUSINESS INSIDER
Posted by: Andreea Hirica
Posted on: Contagious Ideas
