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Cable TV Will be Replaced by Streaming

Cable TV Will be Replaced by Streaming

BY Jimmy 5 Nov,2020 Cable TV

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In 2015, Jeff Bewkes, Time Warner's chief executive, met his senior management team to discuss the future of his two flagship cable networks, TNT and TBS.

For more than a decade, TNT and TBS have been maintained by rebroadcasting of hit shows like Seinfeld, Friends, Family Man, The Office and more. But eventually they ran into challenges from Netflix, Hulu and Amazon Prime Video. These streaming companies have obtained the digital rights to the hit shows, allowing viewers to watch the entire season on demand instead of having to watch it on cable TV at a certain time.

At the time, Bewkes said in an interview: " Streaming media has excellent performance and they have such superior technology." "Cable TV doesn't provide full video on demand. We rely heavily on advertising."

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One year later, Bewkes agreed to sell Time Warner to AT&T for more than $100 billion, including debt. The following year, Rupert Murdoch also announced his exit from the cable business, selling most of Fox's assets to Comcast and Disney for more than $70 billion. The two men seem to have come to the same conclusion: the good days of cable TV are over. The longer the delay, the lower the value of these assets. 

Under the cable model, consumers cannot choose the channels they are interested in and pay per bill. Consumers must buy dozens of cable channels at a time, even though they may only be interested in a few of them. For a long time, with this bundled sales model, cable TV has been regarded by media executives as a goose laying a golden egg.

In addition, in the past, popular cable TV networks were guaranteed in terms of distribution and payment, because if operators like Comcast decide not to pay for ESPN, then competitors such as Dish and AT&T’s DirecTV will dig out those who like sports programs.

But things are different now, and some streaming services already have enough program content to thrive in a smaller ecosystem of streaming media services.

Possible Outcome

The cable TV networks will continue to be profitable, and recent distribution deals ensure that. Still, some companies may not be able to succeed in the streaming world on their own, and they may need to merge to survive. 

John Malone, the billionaire media tycoon who has been mulling the integration of cable TV for years, has long advocated asset consolidation. AMC's The Walking Dead alone is not enough to maintain the survival of cable television, but if combined with Lionsgate's Mad Men, MGM's 007 series, as well as the Discovery of reality show Top Chef and documentary program Deadliest Catch, this combination will provide enough content for cable TV in a period of time. Mr. Malone owns shares in Discovery and Charter, both of which could be used as vehicles for acquiring low-cost cable companies.

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