Cable Companies Fight Losing Battle for Exclusivity

The cable companies have had it pretty good for quite some time.  A virtual monopoly over TV-hungry Americans often not even facing the competition of another cable company led to skyrocketing rates and consistently poor customer service – but there just wasn’t an alternative.

Now, with the explosion of easy-to-use online options for viewing traditional TV programming the cable companies are facing their first real threat (sorry DirectTV, a strong rain knocks out your service…) and they are responding my lowering their rates, offering ala carte pricing and overhauling their approach to customer service…Jusk kidding.  They’re not doing any of those things:

SNL Kagan pegs overall subscription revenue from telecoms, satellite companies and MSOs at around $22.5 billion in 2008. Cable companies want their deals to include online and set-top VOD access to everything they already pay for with cable network license fees or, in some cases, retransmission fees—and they don’t want to compete with services that don’t pay.

That would include Boxee, the media center-like service that easily can deliver HD-quality internet video to the TV screen but is losing access to Hulu content Friday at the request of the JV’s content providers. That access is being pulled, at least in part, because of ongoing negotiations with cable providers. They also aren’t thrilled by Hulu, which has the rights to everything it distributes. (via)

The problem for the cable companies is not all that different for the one facing record labels – there is no longer a true scarcity and without that scarcity it will become increasingly difficult for the cable companies to convince viewers they’re worth the expense.  If they lose subscribers they will not be eager or able to pay the hefty licensing fees charged by the networks.  Unfortunately for the cable companies, what they offer is becoming obsolete and the networks won’t need them for distribution and will find another way to make money (or not) by offering their programming more directly to the consumer.

While they may fight it for a while, the cable companies will be a thing of the past, at least as we know them today.

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• CBS Interactive: “Well Within Our Rights To Stream Hulu Content” (techcrunch.com)
• Hulu cuts off Boxee, Old Media takes one step forward, two steps back (inquisitr.com)
• Why the rest of us couldn’t care less if Hulu is pulled from Boxee (inquisitr.com)

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