Cable TV's Decline: Two Views

by: Paul Kedrosky

There have been a number of articles lately about people cutting costs by cancelling /cutting cable TV service. That's certainly true, but it is more structural than that. Many people are coming to the correct conclusion that in the age of Hulu, Boxee, Bittorrent, etc., that cable TV is an over-priced relic of another entertainment age. While some broadband providers have stakes in such services, the transition is neither going to be costless nor smooth -- doubly so in the current economy.

Here is a quick graph of Google search trends for "cancel cable" over the last few years. It is, as we say in the business, up and to the right.


A note from a reader in the consumer electronics industry who begs to differ, at least a little, with the "cable TV decline" hypothesis:

The classic home entertainment in a recession seems to be playing out so far. FPTV prices actually went up after the super bowl and it turns out … that the Best Buy's of the world jacked prices on low end BD players as they were running low on stock over the holidays - the CE OEMs underestimated demand. If this hangs on who knows, but so far it is playing out this way.

Also, to your cancelling cable post:
A) only in the US (no one else has much legal access)
B) Hulu is clamping way down and been losing some shows - the studios
are going to kill their one good idea again
C) these are still miniscule fractions of the cable audiences

An example: Dollhouse is a new show from Joss Wheden (Buffy the Vampire Slayer, Firefly, etc. - huge cult following). Didn't even hit 5M viewers on its pilot night, and 5M is the bottom cut-off for anything to even vaguely payout on TV, but was considered a smash hit online with 50,000 viewers. Online is coming, but it's still us silly bleeding edge folks - even for the 12-18 crowd (who can't seem to watch more than 5-10 minutes of anything anyways).