The trend towards cord cutting is undeniable, but it’s not the only thing ailing the cable industry. While it’s true that cable is losing subscribers, the top TV networks are losing them even faster. This gets to the heart of the problem facing the pay TV business. While many people are ditching cable in its entirety, the existence of pay TV itself is not the true problem, a broken business model prevalent throughout the industry is.
It’s no coincidence that those top TV networks that are losing subscribers also happen to be the most expensive. Price has long been the number one complaint with cable and the factor that has driven many to cut the cord. But those who aren’t quite ready to abandon traditional television entirely have found ways to save by “shaving” the cord rather than cutting it, opting for stripped down basic cable packages that often include local channels but not the pricey ones like ESPN. These packages have existed for years, but cable providers have not marketed them, steering customers towards more expensive packages instead. Until now at least, as AT&T and Verizon have both begun touting these affordable basic bundles in an effort to lure cord-cutters back to pay TV.
The phone giants recognize that to keep their pay TV businesses profitable, they need to stem the tide of subscriber loss. That means taking the price complaint head on. Bringing down monthly bills will certainly help, but in general pay TV operators are still figuring out what to do. AT&T and Verizon are pushing their discount bundles, Verizon and Dish Network are prepping internet TV services, while Comcast and the other big cable companies seem to be staying their course. Surprisingly, none of these companies seem to be attacking the problem (high prices) at its source.
The content makers have the cable providers over a barrel. They know that the cable companies need to have their top content in order to be successful. Period. So they can charge whatever they want for it, and the cable companies have to pay up. Until now, cable companies have simply shifted that cost onto their customers, but as the average cable bill climbs towards $100 a month, and already exceeding that for many customers, the business has reached a tipping point. Consumers have said enough is enough, leaving their cable providers in a tight spot.
That’s the trouble with being an aggregator. To escape the high prices, some consumers have moved to a decentralized TV solution. To watch their three favorite shows, they may watch one on Netflix, one on Hulu, and another on a network’s website. People once paid for cable because of the convenience, putting their favorite shows and more in one place for them. Now they can’t seem to do that economically. Consumers are turning to the web for content instead, which is not only cheaper but accessible from all of their devices.
While the incumbent pay TV providers scramble to find a solution, one company has already figured it out. FreeCast Inc is able to offer its Rabbit TV subscribers access to thousands of shows and movies, and much more, without paying a king’s ransom to content makers. Just like cable has done for years, Rabbit TV brings everything together into one place, but while it accomplishes the same goal, it isn’t just pay TV for the web nor vulnerable to the same pitfalls. Rabbit TV is the world’s largest online media guide, telling users what’s on and where, through a single interface. By directing users to media at its source, Rabbit TV brings cable style convenience to the much cheaper decentralized web TV experience. By serving as that aggregation point, the FreeCast guide captures millions of eyeballs, making it an attractive advertising platform. But because users are simply directed to content, the content provider is able to keep 100% of advertising and subscription revenue, rather than pushing the cost onto customers in the form of a per-subscriber fee.
If you want to know what the future of TV looks like, then look no further. The high price of content means that aggregation via cable TV will cease to be affordable, moving the television experience to a decentralized format delivered via the web. The Internet will continue to grow and will likely be seen in history as more significant than the printing press, radio, or television. The company that can deliver a reasonable price and modern convenience in that new TV landscape is in position to become one of the greatest media plays of all time.