As the internet has gotten extremely fast, more and more customers have begun to stream digital content from their personal devices – from PCs, to mobile phones and tablets. Indeed, the natural monopoly that the cable providers have enjoyed over the years is slowly eroding. Today cable providers are facing competition from content delivery platforms (YouTube, Hulu, Netflix, etc.) and some are even beginning to produce original programming and content.
The ability to deliver programming that was once exclusively distributed by cable and satellite providers is the next big opportunity in the market. However, there exists a strong hesitation with digital video and to finally “cut the cord” from cable providers. As customers become more and more frustrated with the limited programming at a high cost that they receive from their cable provider, soon a critical mass will shift to consuming purely digital content. However, as it stands now, the content that has not been passed onto digital video includes live sports and live news, and other premium content, which has been a large barrier for customers considering cutting the cord.
One potential business model is Aereo, which is an antenna-based subscription service which streams broadcast television to any internet-enabled device. With monthly subscriptions starting at $12 (and only in NYC), Aereo has already been sued by a number of large broadcasters who claim that Aereo redistributed their private content without acquiring appropriate licenses. For smaller technological companies to win battles against the broadcasting behemoths, they must not only provide customers a winning value proposition (the content they want for the right price) but also establish that the airwaves are open and free (thus skipping over the infrastructure landlines that cable providers build).
Until this critical mass happens, where customers find true value in the service provided over the internet waves, and cable providers lose footing to smaller third-parties who can provide the same quality of content for the right price, the digital video industry will not take off. There are many factors playing in on this tipping point; but as someone who has already cut the cord, I believe this tipping point will happen.
What do you think? Will you cut the cord in the near future?