The television industry is growing increasingly worried that budget-conscious viewers may shift from expensive cable subscriptions to the web, The New York Times reported today. Thanks to the growth of free video websites such as Hulu and downloadable shows on iTunes, fans of "Lost" and "The Office" no longer need to subscribe to traditional cable and satellite services. In response, companies such as AT&T, Comcast, DirecTV, Time Warner Cable and Verizon have approached cable networks like Viacom (MTV, VH1 and Comedy Central) and Scripps (HGTV and the Food Network) to explore new business models which would allow viewers to watch shows online but only through a paid log-in.
Although my Time Warner bill is relatively high (around $150.00/month for cable, high speed Internet, DVR and HBO), the thought of unplugging my cable and being forced to watch "Gossip Girl" on my tiny VAIO just doesn't cut it. Other consumers feel the same way--earlier this month, CNET posted a useful list of inexpensive ways to stream online video and TV content from the Internet onto your flat screen. But while viewers can save mucho dinero in the long-run by ditching cable for Roku or AppleTV they must be prepared for a tradeoff--limited content, poor video quality and sketchy sound. According to CNET, Roku, which gives users access to Netflix's on-demand video service, lacks popular releases and video for non-HD titles is not DVD quality. Other options, including AppleTV, Vudu and 2Wire MediaPoint media player, also have a limited selection of videos and TV titles.
While some believe that cable operators face a similar dilemma to that of the newspaper industry--creating a workable Internet business model in an environment where advertisers are wary over paying top dollar for online content--I am skeptical that the fate of Time Warner and other companies (despite the recent bankruptcy of Charter Communications) is as dire. It will likely take a year at least for digital video players to improve so substantially that consumers dump traditional cable services, buying cable operators time to adjust their business model to better compete.
My advice? Unless you're eating Ramen to compensate for your soaring cable bill, hold off a little on purchasing a web TV box until content expands and quality improves.
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