The Demise of the Cable Model? Not Likely. But Still ...

Just as with cord-cutting, cord-avoiding, skinny bundles and free-riders (oops, I mean OTT programmers), the set-top box rule-making studies aimed at helping Google manufacture even more boxes (as demonstrated already) won't mean the demise of the cable model.&#160; Or, as some now call it --&#160;including telco, satellite and legacy cable --&#160;the "pay-TV" model.An aside: definitions keep evolving and become increasingly confusing.&#160;In legacy cable, "pay-TV" meant services such as HBO (the first&#160;truly successful premium service).&#160; In some press reports now, "pay-TV" means the "basic" bundle.&#160;"Free-TV" once meant over-the-air broadcasting.&#160; Today, "Free-TV" means over-the-air broadcasting for those in a market with good reception; everywhere else, everything is "pay-TV" today.Analysts at Moody's estimate the cable industry could lose as much as $10.6 billion annually or about 10% of current revenues &#8230; "if" something actually comes out of the NPRM (Notice of Proposed Rulemaking) process.&#160;I think the folks at the major "pay-TV" companies know how to create such a confusion of processes, standardization hassles and dead ends that nothing might come of the FCC's stated aim of more competition.&#160; Meanwhile, the marketplace will keep evolving beyond any attempt to remake cable's business model.While I don't believe there is any "good" in the "bad" within the FCC's process, I think the world will bypass it.&#160;Which means there are more serious challenges to the "pay-TV" universe.&#160; In an unusual instance, for me, of agreeing with Dish's CEO Charles Ergen, retransmission consent seems a bigger challenge for the greater "pay-TV" eco-systems.&#160; Just as with the under-attack big bundle of channels, the once-free over-the-air broadcaster must-pay-to-carry bundles will keep raising fees to the breaking point.Nothing, except of course the NFL, can keep raising fees forever.Random NotesMeanwhile, over in Barcelona the Mobile World Congress is making news that is likely to seriously re-order the media eco-systems faster than the FCC can standardize rogue STBs.&#160; Cellular 5G is just over the horizon &#8230; and it will arrive for real with virtual reality.&#160; Bandwidth with speed will rule.&#160; And sooner than we think.The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated bloggers.&#160;

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The Demise of the Cable Model? Not Likely. But Still ...

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Paul S. Maxwell

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The Demise of the Cable Model? Not Likely. But Still ...

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