Cable TV – Sword of Damocles pt. VI.

Emmy Nominations again signal the death of cable TV. 

• The 2018 Emmy nominations (see here) are out and for the first time, it is one of the streaming services that tops the table knocking HBO into second place.
• Netflix has earned 112 nominations, followed by HBO on 108 with NBC a distant third on 78.
• The other streaming services did not fare nearly as well with Amazon Studios on 24 nominations and Hulu on 26.
• However, the direction that the industry is taking is clear and I think that the warning bells heralding the demise of cable are really starting to make a lot of noise.
• Whether these bells have been heeded in cable TV’s corridors of power remains a mystery as I have seen no sign to that effect.
• Content is king and if the content that users want and are willing to pay for is freely available on the Internet, then there is very little point in paying for $100+ for a cable TV subscription.
• This leaves the cable TV companies with only fast and reliable broadband Internet access as a desirable product.
• This can already be observed as 56% of cable TV subscribers only keep their subscription in order to get access to fast and reliable internet (see here)
• This is also under threat as one of the best use cases for the new wireless technology known as 5G is fixed wireless access.
• 5G’s ability to use huge blocks of unlicensed spectrum combined with sophisticated tricks with radios and antennae would enable cost-effective competition with both fibre and cable delivered internet access.
• Furthermore, with no requirement to dig up the roads and (potentially) user-installed receiving units, the cost to roll it out would be far lower.
• This would make it possible to have very competitively priced internet-only access in the USA for the first time.
• With this scenario, the cable companies will either have to cut their prices massively or face losing most of their business.
• Either way, I think this represents an existential threat to the cable tv industry that will need to rethink its proposition to survive.
• I suspect that the result will be much smaller, more innovative but less profitable cable companies offering better customer service than they do today.
• The alternative is to be remembered as case studies of dominant companies that fell by the wayside because they refused to move with the times.
• I doubt that many of their customers would be sad to see them go.

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