To their credit, both Time Warner and Viacom are listening to what many TV viewers have been asking rhetorically now for decades: “Why should subscribers to cable, satellite and fiber-video programming services have to buy through tiers of unwanted cable and satellite TV channel packages in order to access the channels and services that they value and have the available time to watch and to use?”
That is why both companies’ announcements last week, that they are turning their flagship HBO and Showtime networks (and some CBS television programming) into over-the-top, online streaming video services, were so widely and warmly received by millions of frustrated pay-television and broadband video programming subscribers. I also wholeheartedly welcome these new and exciting transformations.
The Time Warner and Viacom actions are evidence of an evolving pay-television marketplace and changing consumer expectations. These developments are causing industry management and analysts to challenge the validity and sustainability of core industry wisdoms, which have centered industry marketing efforts around selling service “bundles” to afford “one-stop-shopping” convenience to pay-television and communications subscribers:
Pay cable, satellite, broadband and mobile subscribers will continue to fork over premiums to their service providers for access to bundled channel and services packages and a select group of cable and satellite-TV networks will be able to defend their handsome cable and satellite subscribership levels in the face of increased programming competition from stand-alone broadband and over-the-top video providers, who find it easier and cheaper to distribute video content by leveraging our “Internet-of-things” ecosystem.
One can surmise why, and maybe even envision how pay-TV networks will offer popular programming to non-cable and satellite subscribers as over-the-top services on alternative broadband platforms. Indeed, those pay-TV network insiders who reconsider these wisdoms and decide to expand distribution options for viewers could stand to benefit significantly:
Pay-TV networks will be better able to maintain overall subscribership count levels across all their platforms.
Pay-TV networks will arguably be better positioned to taper rising programming and advertising costs.
Pay-TV networks will be better able to counteract consistent and considerable losses owing to piracy, and subscribers would have fewer incentives to illegally acquire and download protected content.
Pay-TV networks will be better positioned than before to monitor subscriber demand, customize content to comport with subscriber preferences, and market new services via direct sales channels to consumers.
I am reluctant to say at this early stage whether Time Warner and Viacom will be more Pied Pipers than Lone Rangers. But I hope industry historians will look back on these HBO Go, CBS All Access and Showtime announcements as the opening salvos that break bundled pay-TV packages apart and into real á la carte offerings.
What I can more assuredly say now, however, is that fundamental changes in pay-TV network distribution models will up the ante considerably among all programmers to compete better on price, distribution and programming quality. Furthermore and just as importantly, video subscribers and TV viewers will have greater latitude to piece together their own personal viewing menus of channels, packages and services at more affordable prices and over more platforms and devices.
The future for video programming subscribers looks brighter now than it has for some time. This is one revolution that can be televised.
Rep. Bobby L. Rush, D-Ill., is the ranking member of the House Energy and Commerce Subcommittee on Energy and Power and a member of the House Energy and Commerce Subcommittee on Communications and Technology.