Last week HBO announced
plans to increase program offerings using internet-based streaming. While the very popular service has had some
presence online, the bread and butter business has been delivering programs in
cooperation with traditional cable and satellite services. In the past in order to view HBO programs on
your tablet, computer, smartphone or internet connected TV, you were required
to be a cable or satellite service subscriber.
In fact, research indicates that HBO is a significant driver of cable
customers to subscribe in the first place. Simply put, up until now if you wanted to
watch Game of Thrones, The Sopranos or Boardwalk Empire, three very popular HBO series, you had to
subscribe to HBO via your cable company and pay a hefty monthly bill.
For several years
customers of cable and satellite services had complained that they were forced into
expensive program packages in order to get one or two of the networks they
really wanted to watch. For example, the
average US cable customer pays $5.00 per month for ESPN even if they never
watch it. Recently there has been a slow
but steady erosion of cable subscribers who prefer the “pay for what you watch”
model promoted by online program providers.
HBO, the 800lb gorilla, has been slow to embrace the online model until
now. Their decision may bring us to a
tipping point toward a la carte pay TV on cable.
It is not only the cable
networks that are embracing an online pay-as-you-go model. CBS announced that it will begin offering
most of its shows online for a $6 monthly fee.
This will allow popular CBS shows to be viewed on demand bypassing local
CBS affiliate (in Cincinnati Channel 12 WKRC). While the other major broadcast networks have
not announced similar services, competition will mostly force their hands.
These developments may
offer the viewer more options in convenience and program diversity. The impact however goes well beyond program
choice. The very basic business model of
local TV stations is changed by the CBS plan.
Once a conduit for a national schedule of programs, the local station is
no longer required to retransmit programming coming from the networks. The worrisome outcome may be that the TV
stations will follow the lead of radio stations when radio networks
disappeared. AM radio today has become a
marginalized service full of shrill talk and a forum for both far left and far
right wing zealots.
The train has indeed
left the station and there is no turning back.
Let’s hope that some creative minds can find a sustainable model for
local TV stations. They do provide local
services that are invaluable to the communities in which they broadcast.
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