May 112012
Cable TV increase and decrease in subscribers in 2010

Cable TV Market Subscriber Gains and Losses

With cable providers hurting from satellite and Web TV distribution, there’s disturbing piece from ReadWriteWeb on the effort by old media content providers to maintain the current distribution paradigm:

The Internet was supposed to change everything. Television would be turned on its head, and big cable would be screwed – finally. 

TV is different now, to be sure, and those changes will continue for some time. But the Web-destroys-cable narrative many hoped to see isn’t quite playing out that way. Recent moves by content providers, cable companies and ISPs aim to ensure that that storyline never comes to fruition.

The tension between traditional content providers and the Web’s new model of distribution is nothing new. Networks have begun to rethink the practice of making new episodes available online for free, while some of the most coveted premium content (see HBO Go) remains locked behind the gate of a cable subscription.

Last week, word surfaced that Hulu may require a cable or satellite subscription in the future, a prospect that would effectively bring an end to one of the most promising – and popular – sources of TV content on the Web, or at least transform it into something very different.

The news, which was reported by the New York Post, hasn’t been substantiated. But if it’s true, it marks the strongest sign yet that big content isn’t ready to abandon its traditional distribution and revenue models for something that, while more innovative, is still largely unproven.  

Watch Netflix and Hulu carefully as they may serve as barometers for the future, revealing to what extent traditional content providers will accept a new distribution model. Netflix expects to add about 7 million new subscribers this year but is bleeding money to pay for content. And watch for the anticipated effort this summer by ISP’s to “voluntarily” throttle down access to file-sharing networks such as BitTorrent, locking out the other alternative of just grabbing shows for free. All one can say is that the TV and cable companies are not about to willingly go through the upheaval experienced by the music industry.

Unless of course, Apple forces their hand.

Jul 222011

An interesting acquisition if it is ultimately successful. Apple has no shortage of cash and securities ($76.2 billion) and Hulu will “only” go for a couple of billion at most. And as Bloomberg points out, it would add synergy to Apple’s video play and position it for the future. Just as Apple was the first to jettison the floppy drive, they will be the first to incorporate massive use of video and this would provide them with a subscription service to counter Netflix. Other suitors may be out there, but it’s a logical match for Apple.