Revisiting a Forecast About the Future of Cable Television

September 1st, 2010

Last November, I wrote a column here about the future of cable television.  In that column from last November I forecast:

“Cable television subscriptions will experience noticeable percentage declines in the next three to five years.”

Last week it was announced that for the first time in history paid television subscriptions dropped 216,000 with cable taking the greatest hit.

The conventional wisdom of course is that this is due to the bad economic conditions of today.  Of course that is a factor, but the times have been bad for the past two years.  The new dynamic is what I touched upon in last year’s column; that the video viewing marketplace is fundamentally changing, that disintermediation is entering the living room with televisions with internet connectivity and that people have become increasingly comfortable with alternative screens.  In addition, people have come to accept paying for what they watch.  The cable television model is based upon having people pay for all the channels they don’t watch.  Why would people who willingly pay for what they watch any longer except paying for channels they don’t watch?

Of course, a decline of 216,000 subscribers is nowhere near a “noticeable percentage decline”, but I believe that this first ever downturn will be looked back upon as the early indicator of the trend I forecast last year.  As for the rest of that forecast from last years’ column:

“This decline will only be slowed if they [cable operators] accept unbundling and price per channel. This will cause a variety of cascading problems for all those reliant upon cable television distribution.”

This part of the forecast will take a few years to become fully realized.

In conclusion, there might be an occasional uptick in cable television subscriptions ahead, but the long term trend of declining subscriptions has just begun.

6 thoughts on “Revisiting a Forecast About the Future of Cable Television

  1. Dear David,

    That is really interesting. How cool that you foresaw that happening.

    It is interesting that the cable, cell phone, credit card and other companies just lead us around like sheep, set the terms, conditions and pricing and we all (or most of us) just put our heads on the stump.

    JH

  2. David:

    For those of us who live in a neighborhood filled with long copper cables for a phone system, cable (Comcast here) is the most modern infrastructure available.

    I cannot reliably receive faster than 384 kbps on AT&T’s copper lines. Every time I see an advertisement for high speed AT&T Internet, I get angrier and angrier with AT&T. In fact, I just received lettermail from them for it. I plan to call in to them just to tell them to figure out which customers are too far away from their central offices before they make other customers angry by wasting money on advertising with false promises.

  3. Forgot to mention that Gmail considers 384 kbps a slow speed connection and dumbs down its interface.

  4. Agree with you, about three years ago, I tried to get the Dish network to allow my dying wife watch the Bill’s football game, and of course you know their answer, of course not. I would have had to buy the full NFL package, hope they finaly get with the new world.

  5. With Google TV and Apple TV, “pay as you watch” trend may replace the current business model of Cable and Satellite. I am paying way too much for Directv and as soon as the Apps programming opens up for Apple Tv, I am going to drop Directv.

  6. The cable companies have long had their way, with subscribers just allowing the travesties of the past, until they realized they were being played for suckers. Now enough is enough things have to change and things would have to be better or else we dont sign up.

Leave a Reply

Your email address will not be published. Required fields are marked *