Cable TV: A Vanishing Breed?


CATV, as the industry was commonly referred to in the 1940s, ’50s and ’60s, evolved from a community antenna television service basically providing better reception to one selling more channels with better reception to one offering satellite and pay TV signals. The “new industry” was called cable television.

Evolutionary progress of the industry over the past half-century is accelerating into a revolutionary process which will force a redefinition of today’s cable-television industry into a different and more diversified one, if it is to survive and prosper.

The rapid convergence of technologies over the past decade has led to a redefinition of a substantial part of the industry into a business which hopes to capitalize on the “triple play” of video, high-speed data and voice, along with other enhanced services.

But increasing convergence of technological advancements also has intensified competition and has dramatically diversified the base of competitors.

Our industry faces competitors ranging from direct-to-home satellite to established communications carriers, as well as overbuilders. Telco-satellite joint ventures, now competing with cable, will soon find themselves competing with satellite broadband-to-consumer services, such as WildBlue Communications, which has entered rural markets through a joint venture with the National Rural Telephone Cooperative.

Both cable and satellite will soon feel the impact of a new national, over-the-air digital service offering 30 channels of programming such as Discovery Channel, Fox News Channel and ESPN, along with HDTV capability, all for $19.95. This service will be the low-cost provider competing directly with established services such as DTH and cable.

VoIP, now embraced by the cable industry, is already highly competitive, particularly from technologies that piggyback on existing networks without paying any infrastructure costs. Skype offers free voice services worldwide to a large number of users, all for free, so long as they are communicating within the Skype family. Its founders have just offered a “pay per use” service for Skype customers to connect to non-Skype users for a fee.

Ultimately, there will be myriads of video-on-demand channels provided directly over the Web, with technology that can link computers to television screens.

It is inevitable that high-speed broadband capacity will rapidly become a commodity and drive down rates for service.

The “cable” companies of the next decade will need to be “communications” companies using the broadest definition of the word, one which embraces media, entertainment, telecommunications and related technologies and software. The leap from a triple-play strategy and focus on VOD to fully understanding and exploiting the “pay-for-play” and mobile market through a wide variety of platforms is critical to the future of our industry.

Those in the industry who to fail to recognize and exploit these important trends will become a vanishing breed.