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Big Cable Must Admit Landscape Has Changed

2016 04 04   Peter Feinstein   Media and Regualtion    

What the cable systems don’t understand is that they are basically utilities. I know they think themselves so much more, but they are mistaken. Gravely. They are the conduits through which data passes. They own none of what they deliver, yet their words and actions make me think they believe differently.

I read their commentary and legal arguments and come away thinking that they believe they own the rights to everything they transmit. They’re wrong. The truth is, they are merely well-paid delivery services desperate to keep their profits flowing by holding onto the entertainment they deliver in exchange for excruciatingly high prices (that promise to go higher).

They charge the owners of the entertainment for access to you and me, while charging us for access to the entertainment. It is an ingenious business model for as long as they can stand in between the owners of entertainment and its consumers. But that middle ground is disappearing. If the cable companies want to survive, and I mean literally stay in business, they’re going to have to come to the basic understanding that the business model upon which they were founded, and under which they’ve flourished, is going through a radical reconstruction that promises to shutter them – unless they accept what’s happening and find a way to shift their place in the revenue-generation stream through relevance.

Misrepresenting themselves as guardians of innovation – or worse, intimating that, by taking all those neat toys from their grasp, the government and other “interlopers” will actually inhibit the innovation of data delivery to consumers – is a specious argument that any second grader can see through. Even kids know the cable systems are becoming irrelevant to their day-to-day entertainment experiences.
This post is simultaneously entertaining and brilliantly business-savvy … and quite possibly the most accurate descriptor of what’s likely coming to the set-top cable-box struggles we’re seeing unfold.