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If your parents are to be believed, there was a time when televisions had only three channels. These were presumably dark times. According to them, it wasn’t until the late 1970s when the advent of cable television came around with double digits worth of channels. Cable begat satellite and premium cable and so on and so forth, but the effects remained largely the same: more channels meant more options for television viewers. So where a third of the television-owning populace watched All In The Family every week in the early 70s, an inexplicably popular modern show such as NCIS claims just a few percent of the television audience during its timeslot.
I have made the case in the past that this is a golden age of television, in part because of this. The fracturing of the audience allows shows to survive on small crowds rather than pander to the lowest common denominator. I still stand by that opinion. But it is also a worrying time to be a television company. For the first time since the advent of cable, the television industry is experiencing a revolution in the way it does business.
You may have heard about this thing called Netflix. Apparently, it’s pretty cool. Netflix and Hulu and other streaming services allow people to watch their favorite shows and movies online, at any time. Now, this can be a good thing for the existing industry. The creator of Breaking Bad attributes the viewership for the series finale to people being able to catch up with the plot via Netflix. But the cable company concern should be obvious: if people can watch their favorite shows online, then they might one day stop watching them (and the advertisements they’re packaged with) on cable. And, frankly, the online outlets make a very compelling case.
Netflix is $7.99 a month. So is Hulu Plus. For comparison, Time Warner Cable’s most basic option provides “over 20 channels” for 19.99 a month. Between Netflix and Hulu, you can find nearly every TV show or movie that you’d want to watch, and both now offer original programming, such as House of Cards. There’s a wide range of devices that now allow you to bring them up onto your television screen, if you aren’t crazy about the laptop viewing experience. If you are okay with waiting a little while to watch your favorite cable shows (and in this world of Twitter you might not be), you can save a significant chunk of money by streaming them.
Certainly there are people out there who have already decided to replace their cable bill with digital subscriptions, but there doesn’t seem to be much evidence that this is a widespread trend. The glue that keeps people stuck to cable? The few things that people must watch live, the things that immediately lose value after they’re aired. The news is one of those things, but it is mostly an older audience that relies on TV to find out about current events in 2014. The big prize in the world of television today is sports.
ESPN charges cable companies over $5.50 per subscriber, per month. The second most expensive channel charges less than $1.50. These fees (and ads) recoup the large sums ESPN spends to broadcast live sporting events. Close to a hundred million Americans pay ESPN a combined $6 billion a year. $1.9 billion goes to the NFL; another $700 million to Major League Baseball. Whether you watch sports or not, that $5.50 a month shows up in your cable bill. What’s a cable company going to do, not carry ESPN?
Sen. John McCain has twice introduced a bill to require cable companies to un-bundle channels and offer a la carte pricing. In other words, you’d only pay for the channels you want to watch. Said bill has not gone anywhere either time, because it is Congress and there is money to be made in keeping the status quo. Cable companies like that you have to pay for a bunch of channels you don’t watch. But they may have to sacrifice that in order to compete with the internet.
TV, as in the entertainment format consisting of 30 and 60 minute episodes, is better than ever, and will continue on for the foreseeable future. TV, as in the box after which the format is named, will probably have to change.
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