Television in Trouble

There are forces at work that are going to completely change the television business in the US. On the one side there are the major television networks who believe that it is their right to earn large sums of money from television, just because they have in the past. On the other side is the consumer who is tired of the cost and increasingly switching off. In the middle are the cable companies and the cable content companies.

The consumers are fed up. Television has become unwatchable as the number and length of the commercial breaks has extended. We used to get 48 to 50 minutes of content in each hour, and now we get just 42 minutes. At that rate a season of 24 has less than 17 hours of content. The only way to watch a TV show is to record it on a DVR and watch later, skipping the commercials. Once we get in the habit of watching TV offline, it becomes much easier to cut the cable completely and just watch the web. Between Netflix, Hulu and YouTube there is quite enough stuff to keep entertained.

Another source of complaint is the constantly rising cost of cable. This is caused by the cable company paying more and more for content. For example, the cable companies pay ESPN $4 per month per viewer to carry the channel, and that fee is rising. Other cable content companies are jumping into the valuable content pool. Ten years ago, the AMC channel used to show very old movies with no commercial breaks, now AMC puts on award winning shows like Mad Men full of commercials. Every cable channel seems to have its must see TV program from the BBC with Top Gear through the the USA network with Burn Notice.

The cost of cable is about to go up sharply as the major TV networks demand commensurate fees for their programming from the cable companies. This does not seem like a winning idea in recessionary times. As fees rise more and more people will cut the cable. Either the cost of cable has to stabilize with cuts to content, or TV risks going the way of radio. (I hear that radio still broadcasts, but I do not listen to it, and nobody that I know still listens.) I think that we will see some big changes coming to TV business over the next year or so.