“Just because you’re paranoid,” as the saying goes, “doesn’t mean they’re not out to get you.
“That’s a good mantra for the cable industry these days. Fear can be a powerful motivator.
I’ve never seen it dance around the insides of cable executives like it has in the last few weeks.
Few predictions of an industry’s utter collapse have been so detailed - or so flawed - as Henry Blodget’s assumptions about the death of TV as we know it.
In the recent piece published on website Business Insider, comparing TV to newspapers, he describes a world in which no one watches ads, over-the-top players supplant cable operators and networks cease to exist. Everything is on-demand, since no one watches linear TV anymore. Or at least that’s the way it is in his house.
The column, while persuasively written, was clickbait.
And yet it caused quite a stir within TV circles, in part because he cleverly zeroed in on the fears of many network owners and cable operators these days. The same is true of the rumors of an Apple TV set - if it even exists (see MCN’s June 11 cover story). And news of Aereo, a new mobile broadcast-TV service. And tidbits of all the new over-the-top players said to be nipping at the traditional TV business model.
All this fear and loathing is a good thing for cable. Ultimately, it spurs the collective pursuit of innovation.
TV consumption habits are changing. And if the traditional TV players aren’t paranoid, they won’t survive, because the pace of technological innovation is a threat in itself.
But the vision of Blodget’s world is far from inevitable. In the days following the post, several analysts practically stood in line to point out the gaping holes in his theory. Blodget claims, “We almost never watch television shows when they are broadcast anymore,” for example, but more than 80% of TV viewing still occurs on a live basis, according to Nielsen.
I won’t go through it point by point. (Brian Wieser at Pivotal Research Group does a much better job than I could.) Suffice it to say that traditional TV content still dominates consumption, compared to other platforms, and ad-supported content is still the dominant form of entertainment.
That could change, but it’s not likely soon. New over-the-top players won’t ever supplant cable operators for the simple reason that they can’t offer the biggest content providers (read: networks) the same massive audience.
And cable networks aren’t about to risk the fat affiliate fees they get from cable operators by flirting with OTT players. The risk/reward ratio doesn’t work. And anyone waiting on a la carte offerings streamed straight to your home without ads? Forget about it, unless there’s a change in the law that allows programmers to package channels.