FOX-Cablevision Dispute: Early Sound of Cable's Death Rattle

Broadcasters have viewed revenue generated from must carry rules as a now essential revenue stream for their stations since their audiences have been in a constant decline for the past 20 years Cable MSOs have made a lot of money charging consumers for bundled programming they don39t want but have to take to get the channels they wantSo in this stand off who are the winners Sports bars in NYC and PhiladelphiaWho are the losers Consumers sports fans in particular Fox as ratings for sports events they paid dearly for are lower with resultant lower revenue Cablevision as they will most likely lose customers who might choose to switch TV providers Advertisers as they will have lower audiences than they expectedSo most everybody was a short term loser except local sports bars where fans had to go to see their home baseball and football teamsDo you think consumers care which company is quotrightquot or quotjustquot in this standoff Of course not They are angry that what they had paid for was not being provided Do you think that increases good feelings toward Cablevision or Fox Of course notIn a column I wrote here called quotRaise Your Hand if You Love Your Cable Companyquot I spoke to the fact that when I have asked that questions to audiences all over North America no one raises their hand and people guffaw out loud as they think that such a funny question Who could possibly love their cable company I have used this question to point out that since there is no positive emotional relationship between the consumer and the cable company there is no loyalty and that the subscriptions to the TV side of the cable business would start to decline as technology disintermediates the cable TV model In this followup column here I was able to point to the beginning of this subscription declineSo is this FoxCablevision standoff just a battle of two large media companies who seem to care more about revenue than the public short term greed versus long term customer relationship Of course it is there is no other way to spin it Fox thought they could win Cablevision thought they could win In both cases the definition of win did not include the end users the viewersWe now live in a connected society This gives people power The power to choose not only what they watch but when they watch how they watch it where they watch it and on what type of screen to watch it on Fox knows this enough to have temporarily blocked their programming online as well as via cable A perfect tactic if you want the government to step in It is this type of available choice that will drive viewers amp8211 who have the control amp8211 to exercise that controlA loose analogy here is Napster After spending a decade increasing prices of CDs from 1295 to 1795 forcing the consumer to buy all the songs on a CD whether they wanted all of them or not was it any surprise that Napster was so quickly embraced The music industry was basically eviscerated in a three year period What did they do They sued the people who had been their customers Hey that39s a really good strategy sue your customers for not buying your product on your terms While they were busy suing their former customers Apple launched iTunes and the music industry no longer controlled their destiny but had to bend to a reality not of their makingThe broadcasting business has been in a slow inexorable decline from its peak in the 197080s The MSO cable TV business is now beginning its39 slow inexorable decline Instead of fighting each other they should be more worried about the disintermediation that is going on all around them The only long term solutions are to change how cable is sold to the consumer and to try to create an emotional connection with their customers Neither of these concepts wereare anywhere in the thinking of these two companiesIf broadcasters and cable MSOs continue with the legacy thinking that prompted this standoff they will in fact speed along their relative demise The consumers will move on find other ways to watch demand a different financial relationship and even find other things to watch if they have to keep paying for what they don39t or can39t watchIs that a rattle I hearDavid Houle is a futurist strategist and speaker He has always been slightly ahead the curve Houle spent more than 20 years in media and entertainment Most recently David is a featured contributor to Oprahcom Check is out here wwwoprahcomdavidhoule David can be contacted at DavidDavidHoulecomRead all Davidamp8217s MediaBizBloggers commentaries at David Houle MediaBizBloggersCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBlogger

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FOX-Cablevision Dispute: Early Sound of Cable's Death Rattle

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David Houle

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FOX-Cablevision Dispute: Early Sound of Cable's Death Rattle

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