Our favorite pastime is evolving – we have moved a long way since the TV’s inception, where one could only hope to see black and white and the various shades of grey. The modern television incorporates a variety of channels, offering content anyone can relate to. No one has to rush back home in order to catch an episode or a sports event that’s about to air – everything can be “tivoed” or watched later, using a variety of options available. However, things are changing and the top networks will have to adjust to these changes, in order to remain afloat. Here are some predictions and expectations about the future of television.
The good old TV wasn’t threatened by streaming video for a long while now – the files were huge and significant network and bandwidth capacity was required. However, the network has finally caught up and the infrastructure required to deliver live linear television content and the necessary infrastructure is finally in place. This has put the traditional TV at risk, so the network companies will have to keep pace with the streaming video technology.
Television and the New Economics
Essentially, the TV business is based on two revenue streams: subscription and advertising. Although premium channels, such as Showtime and HBO are perfectly able to base their businesses on subscription models alone, the vast majority of channels has to work with a hybrid business model – selling advertising and receiving fees from cable providers. This model is already breaking down; think Netflix, for example – based on their streaming service, which blends original programing with feature films, they are able to charge less for their services, while earning roughly the same amount (per subscriber!), seeing as how they don’t have to pay fees to cable providers. Add the HBO Now to the equation and the fact that other network companies need to update their business models becomes obvious.
New Ways of Programming
Many users are discontinuing their cable services, and for a good reason – they aren’t missing out on a whole lot. They can catch their favorite shows on Netflix and HBO (seeing as how the majority of shows are the two’s originals) and, as for the rest, there’s always Hulu Plus. If a user isn’t satisfied with the number of programs they get, they can always opt for a TV antenna installation. All this combined costs roughly the same as using cable television, but brings more features, which is starting to render the cable television obsolete.
The software businesses have seen huge changes, as of recently, what with the fact that cloud-based systems have gained in popularity. Everything is shareable and the security measures are slowly overcoming the potential threats. TV programming is going through a similar transformation – the installed solutions are slowly stepping down and letting the Cloud step onto the throne. The reason behind the cloud being the most disruptive technology ever is outlined in the fact that the legacy players are compelled to completely change their business models, which includes different pricing strategies, sales channels and their basic technology. All this is very expensive, but, although this is currently happening to the cable businesses, it doesn’t mean that these companies will necessarily slowly wither away and die; more likely, they will base their business models on valuable infrastructures and on offering additional services, such as home security.
The cable business as we know it will soon be the thing of past. Younger generations are starting to realize that the new ways of programming not only offer more benefits, but might come as cheaper, seeing as how the users, as individuals get to choose what they want to watch. The cable companies will have to change their business models completely in order to survive!