Imagine an alternate reality where you couldn’t buy a burrito at Taco Bell without being forced to also pay for a chalupa, nachos, a large Dr Pepper, and a bunch of other items you didn’t want. That’s what it’s like to be a cable customer right now. You can get your HBO burrito, but you also have to buy a VH1 chalupa and a Hallmark Channel gordita. But last week, cable’s decades-old model cracked like a taco shell: HBO announced a stand-alone online service that next year will allow customers to stream its shows without a cable subscription. The very next day, CBS launched a service charging $5.99 to stream its most recent shows and library (including gems like Cheers). Suddenly the most Emmy-winning channel and the most watched network were cutting the cord to offer Netflixian alternatives, with more providers expected to follow suit.
So viva la revolución, right? Not necessarily. As much as we all love to grouse about cable bills, breaking up the current system could have all sorts of butterfly-effect consequences that might be even worse. Because do you really want to pay $72 a year to watch 2 Broke Girls? We talked to industry experts to learn how this bright new path could change TV.
Opening Pandora’s (Cable) Box
According to polls, viewers (particularly younger ones) overwhelmingly want to pay for only the few select networks that they actually watch. If your dream cable lineup is Game Show Network, Spike TV, and C-SPAN, you’d likely be in for a major discount. But the popular channels are a different story. Take ESPN: One study calculated that if its viewers alone subscribed to the network (instead of literally everybody with a cable bill), each household would have to pay $30 a month for that one channel instead of roughly $6. ”In a world of the $100 cable bill, you’re not paying for 200 channels, you’re paying for five and getting the rest [for practically] free,” says Janney Montgomery Scott analyst Tony Wible. A dim sum cable menu benefits some, but similar models in other countries such as Canada have shown that viewers can end up paying more for less.
Higher Internet Bills
The Internet may seem like an eternal sea of free streamable video, but the ”pipes in the ground” can carry only so much data. As more users embrace streaming, the pipes are filling up and Internet companies are increasingly setting bandwidth caps. The nation’s largest provider, Comcast, limits streaming to 300GB per month (something akin to 64 hours of Netflix). ”Everybody can’t stream simultaneously without billions in upgrades. Who’s going to pay for that?” asks Gartner analyst Fernando Elizalde.
Goodbye, Investigation Discovery?
”We’ll evolve into a world where there are many more options; you’ll find ways to put different stuff together so you’ll be happy,” Elizalde says. But there is a potential downside: A Darwinian side effect of à la carte viewing is that smaller channels could wither and even die, which would be a shame for some of our guilty pleasures. Can you imagine a world without Southern Fried Homicide? Okay, bad example.