Sunday, March 15, 2015

Cable Bundle Breaking

Years later than I would have liked, it seems the forced bundling together, long a part of the business model of cable companies (big channels carrying the smaller ones that are bundled with them), may be coming to an end. For decades, audience seeking a handful of channels has been sold access to the shows on those channels only if they also buy access to many (sometimes hundreds) of other channels, channels they have little and sometimes no interest in. This has subsidized some channels that, in the 20th century, would have had no other way to get into enough homes to be appealing to advertisers.

One holdover from this period in media distribution include some sites requiring you log in with your cable provider's credentials in order to stream a single episode of some shows (they need to confirm you are paying for the whole bundle, and the restricted access to the show you want is the leverage they use to preserve the bundle model). No business model that needs an obstacle to remain in place in order to survive is robust. Movie theatres used to be able to assume that if you wanted to see the movie, you would rent a chair in their theatre. That stopped being the case for them, and the years of smaller channels getting into homes because they are bundled with bigger ones may also be on the way out.

Another holdover is the impossibility of legally accessing some premium channel's shows in any way other than a full blown cable subscription with premium channels added on. Back when a single show would drive people to sign up for cable (The Sopranos, for example, did that at one time), this was a protective measure; it allowed cable companies to conduct business vaguely as they had for decades. Frustrating as it may be for the audience, there were business reasons for doing it; show producers needed the cable companies in order to be able to offer their show to as many homes as possible. Back in the day, broadcast television and cable were the only meaningful ways to get TV shows in front of an audience (satellite television's business model was close to cable's, so for this post I am lumping them together).

The rise of broadband internet and other technologies and trends has made such bundling less the only option. For many demographics, cable bundling was never appealing and never bought into, literally or figuratively. Now, the premium channels seem to be making noises of letting us all legally get their shows without the hundreds of channels (and dollars spent) we may not be interested in.

Business by crowbar may not be gentle, but short-term it can get things to happen. Like the music industry suing their customers, business by crowbar isn't nice, but seeing it done to those who have done it so long themselves, makes me think turn-about may be fair play. Cable used the shows the audience wanted as a crowbar to force the audience to buy a whole bundle. Now HBO is using Apple as a crowbar to break their shows apart from the cable bundle.

Make no mistake, the scales have tipped. Even old school media heads have ceded that streaming is the future of video. Clearly the bundle is changing. The days of the 500-channel universe are over, CBS chief Les Moonves said Wednesday at an investor conference. The days of the 150-channel universe in the home are not necessarily over but they're changing rapidly. People are slicing it and dicing it in different ways

(from The Fiscal Times, thanks to Romany Malco for putting me onto that story).

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this posted by David August at 2:05 PM 

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