Tuesday, November 12, 2013

Why Time Warner Is Going to Lose

Are people getting annoyed with the traditional TV cable operators?  It seems so.  Time Warner's subscriber loss is content's big win.  The heated battle between CBS and Time Warner shows that people want the content and are willing to get it anywhere.  That gives content providers a leg up on the leverage as they can always sell the content to other providers such as hulu, Netflix and google+ and keep TV operators out of the mix.  That could mean major declines for TV operators.  This becomes especially important as TV channels are typically bundled together - the bad channels with the good.  But as people become more targeted and specific in their watching needs, they will not have the appetite to be paying large amounts, especially for many channels that are not touched.

However, cable operators have recognized this pattern and are still ahead as they also developed the infrastructure for internet cables.  While cable TV may not be as popular, we will still need internet to access content in other ways.  Companies such as Time Warner therefore still will maintain some control/leverage in that way.  It will be interested to see how prices change over time for these cable operators.  Right now internet is so much cheaper than TV, but I would think that pricing structure may change drastically as time goes on.  Yet consumers may not react well if price to access the internet, which as become such a ubiquitous product becomes much more expensive.

http://www.buzzfeed.com/peterlauria/why-every-tv-network-owner-is-smiling-today

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