As Charter, Time Warner deal is announced, what is the future of cable TV?

By Tomás H. Lucero

The giants of cable TV seem trigger-happy about merging. These are great opportunities for investors. The latest acquisition in the media is Charter Communications Inc.’s over Time Warner Cable. This deal, if consummated, will also include Bright House Networks, according to Reuters. The latest wave of acquisition attempts is accompanied by a trend in cable TV to expand internet offerings to consumers. And these trends, along with the eagerness for deal-making, are cable TV’s answer to competition from Netflix, Amazon and their ilk. In the middle of it all, is broadband internet, which has shifted the landscape of home entertainment. Internet-based services are on the inside track while traditional media—read, cable TV—speeds to adapt.

No matter what, TV viewing and the cable TV industry will never be the same after DISH Network introduced its Sling TV service. The novelty of Sling TV tackles two issues which are the key to the unraveling of cable TV: affordability and value. In the traditional cable TV model, consumers buy giant bundles of channels only to actively watch a fraction of them. Over the last ten years, the price of these super bundles has risen drastically. Sling TV offers a miniature bundle of channels for $20.

The sea changes provoked by broadband internet also present dilemmas for content providers. In the old delivery model, networks like Disney sold their entire portfolios to a distributor like Cablevision. Over-the-top TV viewing—viewing where the middle-man is cut out—is not compatible with this older business model nor with current consumer preferences. In order to make a good business out of it, distributors like Sling TV cannot afford to provide the super bundles of traditional cable. Consumers, by the way, don’t want this.

The mirage of consumers is a-la-carte TV viewing. That is, the freedom to customize and assemble their own bundles based on their personal preferences. This particular option, however, is not currently visible on the horizon. TV viewing is ready for miniature bundles, but not customized bundles yet.

Cable TV is not taking any of this lying down. Sling TV is a service provided by DISH Network, a pay cable TV network. Cablevision has announced the launch of “TV Everywhere.” Are these, however, pyrrhic efforts?

One factor that is holding the traditional cable TV model together is that many networks don’t have the following or clout to jump into streaming yet. Many still need to be offered in a bundle to remain relevant.

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