How The Cable Industry Is Going To Completely Implode In The Next Ten Years

The music industry isn’t dead, by any means. What it is, however, is irreversibly altered by technology. As we’ve discussed before, they saw the train coming, thought it would just stop on a dime for them, and instead it flattened them. And we’re starting to see the same thing happen to cable.

Currently, this is how cable works: every channel charges a cable operator a retransmission fee, the cable operator passes that fee onto you and charges extra, and channels are bundled together so, even if nobody’s watching, that channel can still sell advertising. Everybody makes money, everybody’s happy.

Everybody, that is, except the consumer.

Cable prices rise an average of 5% a year. Inevitably, they’re going to hit a tipping point where consumers decide what they pay isn’t worth what they get. And cable and satellite are starting to hit theirs: the industry began losing customers last year. It’s true the number has slowed, and cable isn’t seeing enormous losses to cord-cutters yet.

But we’re seeing a repeat of the music industry here: it’s not a question of “if,” but “when.” Here’s what’s going to happen in the next decade, in a two step process.

First, cable loses its death grip on the pipes.

Cable operators have an exclusive monopoly in areas where they first laid cabling; this is so we could get more fiber in more places faster, but it also created some serious problems. This gives cable operators disproportionate control over the Internet; they own the physical cables, after all. So currently, cable’s plan if all else fails is to just choke your Internet video streaming and hope Netflix runs out of money before the court case gets too far.

×