The End of Cable. What is TV's Next Frontier?

TV spent a considerable amount of time in the technological dark ages.

Progress was slow, business was stagnant, and powerful corporate entities monopolized lines of communication and distribution. Eventually, the rise of cable disrupted this market culture by adding subscription fees, fragmenting audiences, and providing exclusive channel options like HBO.

Those innovations did little to disrupt the monopoly of distributors and programmers. As far as disruption goes, cable made meager waves; streaming services, however, are a tsunami of change that have washed over multiple industries. 

In this article I do my best to provide a primer on the innovations and disruptions prevalent in the cable TV industry as a backdrop for the emergence of streaming services. This change in fortunes, so to speak, has had tremendous impacts not only on business but on the way people consume, share, and interact with visual media. Changes that are worth note.

The Rise of Netflix

Netflix is a prime example of displacement in TV land.

In the past year or so, Netflix has launched a number of award-wining original series available to customers who pay their subscription fee, it has freed people from the tyranny of commercials, and it has begun to use programmatic technology to give customers targeted suggestions based on their view history and that of other, similar viewers. 

In a sense, Netflix is an elysian field for TV-hungry customers. It gives its subscribers greater control over what they watch and frees them from commercials. These are two major draws of streaming services in general.

Are You Not Entertained?

As is the norm in our digital economy, Netflix’s rise was fairly quick. The speed with which disruptive technology permeates the market is part of the reason it can be so disruptive.

Netflix's begat another industry force. Namely, consolidating services. Streaming services are becoming the primary mode of content delivery, and in tandem with consolidating services, they are reshaping the entertainment landscape.

What are consolidating services?

Roku, Amazon Fire TV, and Apple TV are all consolidating services. They have started to replace cable boxes. This is part and parcel of a shift in consumer entertainment culture and expectations. Consumers want great control over what they spend their time watching, and they also don't want to spend more time than necessary watching.

That is why the  business model that cable companies have thrived on is outdated. It isn't just that consumer entertainment culture and expectations have changed, they are constantly changing as more and more of this technology saturates the market. It's a growing movement with no signs of relenting. 

Tv cable companies must catchup or be left behind.

Life Outside the Cable Box

That destabilization has caused historic programmers—such as HBO—to circumvent cable companies by creating Internet-based streaming platforms. This makes it easier for consolidating services to offer classic programming that cable-users are familiar with, without the need to purchase entire cable packages.

Dreary as this picture may appear for cable companies, they have recourses to avail themselves of. 

Cable companies have fertile opportunities to pivot their business models. Cable companies could embrace the streaming revolution, and, they could build upon existing household infrastructure of add new verticals.

For example, cable companies have started providing home security services that use existing circuitry as a base. The truth is that all is not lost for these legacy players; and yet, cable companies as we know them will probably soon be relics of the past. 

Aside from affecting cable companies' business models, the way people interact with, consume, and perceive media is also being affected.

The TV Dinner

The experience of watching television is changing dramatically. At one point in time, TV watching was solely a passive activity. TV viewers had two options: watch or not watch. This limitation paired with the centrality of the TV set in our households invariably influenced home life and the way we construed entertainment.

Today watching TV is a far more active process. In fact, the phrase “watching TV” doesn’t have quite the same meaning as it used to. Watching TV now is more purposeful, more personalized, and more collaborative; it has more to do with the TV as a piece of technology that enhances your viewing experience than it does with the selection of programs transmitted through your TV from your cable box.

Curiously TVs has not lost their import as large pieces of technology that let you experience visual entertainment more fully, despite their mainstay's (the cable box) exit from center stage.

Today Watching TV Is More About the TV Than Anything Else

The TV's survival may be assured by two key advantages over other screen technology.

For one they are much larger than tablets, smartphones, and the like. Bigger is still better—at least in this case.

Secondly, there are interpersonal interactions that revolve around the TV that simply cannot be replaced. As a social nexus, the TV is richly immersive and inclusive. That's why TVs still have a major foothold in domestic life and overtime, as they integrate all types of digital content, will continue to subsume an ever-growing ecosystem of content.

What's more, as user gain more control over what they watch, they will come to need larger and larger screens to enhance the experience.

Give the People What They Want

All sorts of software has arisen that grants users the ability to determine what they watch and how they watch it, to recommend and personalize their content publicly, and to produce original content available to enormous groups of people.

TiVo, for one, has made it possible to record shows and avoid commercials; Netflix has made it possible to rate, sort, and save content, allowing users to personalize, recommend, and store for later viewing; Pandora, Spotify, and Amazon have all harnessed the power of machine learning to enhance customer-experience.

Perhaps as a result of the brief period when people had to conform to mass outlets of entertainment, there was a surge in content created by consumers.

We Stole the Show

The term, “Prosumer,” coined by futurist, Alvin Toffler, denotes consumers who produce content. The prevalence of Prosumers pumping user-generated content into the Internet has become a common occurrence.

Just think that adventurers armed with GoPros have given us entirely new perspectives on all sorts of daring activities; youtubers generate millions of new videos everyday; writers craft articles of varying lengths and on varying topics by the millions; tweets, Pins, Posts, and Re-blogs are also examples of user-generated content that numbers in the millions per day.

There is so much user-generated content that it may someday compete directly with company-generated content: news footage and newscasts, reality TV, collaborative art projects, crowdsourcing, and other collective endeavors may preamble the decreasing popularity of private content.

Users are in control and they want even more control over how they are entertained, no matter the platform or the medium. This is a social phenomenon that marketers have been quick to exploit.

Who Are the Digital Oracles?

Although consumers are forcing media industries to accommodate user-generated content, marketing professionals are pulling the cart. Marketers are attuned to user experience. They adeptly harness that experience to better advertise products, services, and people.

Increasingly, businesses expect to calculate direct return on investment from marketing activity, and given the recent digital marketing boom, the urgency is increasing too. Sophisticated tools of measurement can lead to new strategies, new campaigns, and greater revenue.

The production of user-generated content serves as a guiding star. It points marketers to what their target consumers want to see, care about, and spend money on. The ascent of the consumer, assisted by marketers, requires business models that center on consumer needs, rather than on the needs of a particular channel, platform, or advertiser. The success of content, therefore, now hinges on consumer-oriented multiplatform strategy. The businesses that can resonate with these needs across multiple platforms will more easily capture new profit opportunities.

That’s why digital marketers are scrambling to reallocate and redesign advertising campaigns that build upon the copious amounts of data on consumer behavior and consumer preferences that are coming in from every platform.

It’s a new day in TV land, and the consumer reigns supreme, heralded by digital marketers everywhere.

The Media Bandwagon

Amazon, Google, and Apple are surely taking advantage of both the social and business aspects of the disaggregation of traditional media chains. Their business decisions are further upending the relationship among advertisers, broadcasters, and cable companies.

I recall when CBS and NBC announced their affiliation with Apple TV. Apple TV started with a basic offer of four top broadcast networks, plus PBS; now, Apple TV is a confluence of apps that can be aptly described as a media content cornucopia. The channels can stay alive so long as they join the ranks of consolidating services. However, they won’t have to restructure their business models to do so.

Despite the wholesale absorption of traditional TV content, there are still a number of areas in which broadcasters and the channels that they broadcast have those consolidating services beat.

It Isn’t All Smooth Sailing

Streaming and consolidating services alike let consumers avoid certain annoyances inherent in traditional programming. However, as they absorb major channels, they bring along their historic infrastructures. A cornerstone of that infrastructure is advertising.

One place where broadcasters have consolidating and streaming services beat are commercials. TV-viewers are accustomed to the barrage of commercials and movie trailers that intersperse their viewing. This makes it far easier and cheaper—in terms of return on investment—to advertise on those traditional mediums. Broadcasters receive hefty sums of money from those ad-buys. They wouldn’t need to dismantle this revenue stream to enter the new market.

Another place where broadcasters have consolidating and streaming services beat is local affiliates. It would be foolish to underestimate the relationship between local news and local promotions and revenue. This market is penetrable, but that will take time.

These two features may safeguard the livelihood of broadcasters for a time, guaranteeing them prominent and lucrative spots in the consolidated systems.

Whatever the incongruities between streaming services and broadcast TV, they are surely not incompatible. Apple TV and its counterparts may be the future of TV, but major broadcasters will surely not be eradicated in that process.

Conclusion

TV has undergone some tremendous changes since its inception. From the TV sets themselves, to the programming they brought into people’s home, to the way people related to them and built social networks around them. All these ripple effects touch different market sectors every time and with different intensities.

The most recent groundswell of change has brought TV viewers into the fold with much more say on what type of content makes its way into their homes. This marks a significant cultural shift.

Marketers, businessmen, and social scientists alike should all take notice, and take heed.

Thank you for reading. I write and publish weekly via www.Blogbrain.org, the dedicated repository for my articles, essays and blogs on all things business, digital, life, management & technology. If my blogs help you and you'd like to consider nominating me for the LinkedIN Top Voices List then please fill out this short form. With gratitude.