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The Fiber-Optic Umbilical: Pay-TV Companies Want You to Forget About All That Internet Media Nonsense 

Wednesday, May 22 2013

You want to cut the cable cord, but aren't clear on how to do it. You aren't much of a gadget geek, you don't regularly follow tech news, and while you may have a Netflix account, you may not know about the alternatives: Hulu, Blockbuster, Amazon Prime, iTunes, etc.

You are even less familiar with the hardware that ports Internet video to your TV: Apple TV, Roku, Boxee, and various game consoles and smart TVs. You could do your research online, but if you want to get all the most basic information in one place, pay $2.99 to download the e-book Your Guide to Cutting the Cord to Cable TV by Mark Glaser of PBS Mediashift.

There is a debate over whether cord-cutting is a big phenomenon or limited to a small portion of the viewing public. Glaser cites a recent study that found that 4.5 percent of households had no pay-TV of any kind (cable, satellite, or fiber-optic). That's not huge, but it's 23 percent higher than the year before. The argument that cord-cutting isn't all that popular comes mainly from the pay-TV companies. We don't yet know how big the phenomenon is going to get, but it's real, and it's growing.

That's mainly because of the cost. The average price of a monthly cable subscription is $70-$100. Some cable companies have lowered prices a little over the past couple of years (in response to cord-cutting), but rates for satellite and fiber-optic services have gone up, raising the overall pay-TV average. There's no real competition in pay-TV markets, so for now, there's no pressure on prices other than cord-cutting. This isn't yet an existential problem for pay-TV companies, but it easily could become one. Glaser estimates that about 95 percent of what most people watch through pay-TV is also available through other means, including the Internet and broadcast TV. The remaining 5 percent is crucial, however: It includes premium, cable-only programming like that offered by HBO, sports, and live events like awards shows and most breaking news.

The big question now is whether cable-only networks like HBO will make their programming available online to people who aren't pay-TV subscribers. If that happens, it will mark a major turning point.

About The Author

Dan Mitchell


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