Thesis: An industry that will experience significant change and innovation is that of cable television networks.
This change has been a long time coming, with the innovation of the high speed Internet access available almost nationwide. Cable TV is going to start to become obsolete in the form we are familiar with currently. Television viewing is going to shift to being predominantly an online activity. This shift has already started to take place with the likes of Netflix and HBOGO. These companies success have already demonstrated that this is an industry poised for disruption. Millenials are starting to take over as the dominant power generation and are much more comfortable with the Internet and streaming shows online. This is demonstrated with the vast number of millenials who use online television streaming services already as compared to other generations.
The biggest change in this industry is that people are going to stop paying for bundles of random TV channels that they don’t watch, but will instead pay for specific channels or shows that they watch (a la carte style i.e Netflix or HBOGO). There is an opportunity for cable companies who currently make most of their revenue through cable subscriptions, to innovate and beat their competitors at moving online. This can be accomplished by creating a service of video on demand in which their own subscriptions. Either allowing the consumer to only pay for what they watch, or for smaller bundles of similarly watched channels. This is going to happen sooner rather than later as Dish has already announced plans to stream ESPN, TBS, Disney, among other channels online for a small $20 per month. As Ebenezer Samuel writes about this Dish package, “No matter how you look at it, Sling TV (Dish’s bundle) is intriguing, and, given time and nurturing by DISH, it has loads of potential. A legitimate and full alternative to cable TV is on the horizon somewhere.” This is a good start, but the new opportunities lie within allowing users to select which channels they watch. If someone only ever watches ESPN, then they should be allowed to only purchase a subscription to watch ESPN and not have to pay to watch the Food Network as well.
The biggest drawback of Sling is that it does not offer any of the major cable services currently. However, Apple is setting about disrupting this. As Miriam Gottfried writes in her Wall Street Journal Article, “Apple’s “skinny” bundle will have about 25 channels, a far cry from the 300-plus ones typically offered through cable systems. Broadcast networks owned by CBS, Walt Disney and 21st Century Fox will be among those.” This is the start of the demise for cable television providers. Unless they recognize this trend away from cable TV subscriptions and act quickly on it, some companies are going to be left in the dust.