Last year in October, HBO made it clear that the company plans to enter the lucrative and ever expanding streaming TV market by rolling out its own standalone streaming service at some point in 2015. Quite predictably, the market was abuzz with all sorts of speculations within hours – with some even going to the extent that this could well be the end of cable television as we know it.
Adding more to these speculations, CBS announced only a day later that it too was preparing to join the bandwagon by launching a proprietary streaming service. Similar announcement came from Showtime, CBS’s flagship entertainment channel.
Over the past few years, we have witnessed the likes of Aereo and Netflix taking away a considerable chunk of cable TV viewership each year. But, are all those predictions of an emanating doomsday for cable tv really hold any ground? Well, only time will answer that. However, based on the current circumstances, we’re fairly sure that the proceedings so far could pave the way for the next stage in the evolution of cable tv rather than its sad demise.
Having stated that, it would be still interesting to see what kind of ripple effect the exponential rise of streaming tv causes to future of pay tv. Here’s a brief analysis:
Could it be a positive outcome for pay tv?
This is indeed a possibility, the likelihood of which has already been carefully articulated by Will Richmond of VideoNuze:
Richmond argues that despite all the gloomy forecasts, compelling evidences are about to imply that the entry of HBO and CBS into the worldwide streaming tv market could emerge as blessing in disguise for pay tv. If so happens, then the credit will definitely go to the cost effectiveness of traditional cable tv packages in the awake of proliferating streaming channels/services whose costs are likely to rise with time in the near future.
What’s even better (for pay tv) would be the fact that the rise of streaming services has already inflicted a sense of looming (supposedly) existential threat into the minds of an overwhelming proportion of cable tv industry stakeholders. This will eventually result in many of them consolidating their resources and grip over the market in order to boost customer satisfaction.
Reed Hasting, Chief Executive of Netflix once famously said that the company’s objective was to “become HBO faster than HBO can become us”. Now, with HBO’s grand entry into the competition has indeed brought some serious challenge to Netflix’s domination in several of its primary markets. After all, HBO undisputedly has a far more superior content library compared to Netflix.
This could compel Netflix to reach out to cable providers across the world to strike a mutually beneficial deal. If this really happens, it will be interesting to see the approach the company embarks on.
Also, there’s absolutely no reason to assume that other stakeholders in the streaming industry (e.g. Amazon Prime, Hulu Plus etc.) won’t try to come up with their own deals with cable operators.
So, the bottom line would be that the possibilities are endless and as I’ve already mentioned, only time will tell how streaming services will end up affecting traditional tv. However, one thing is pretty certain – we are going to witness some major and drastic changes in the coming days.
Does a booming streaming tv market means anything at all to net neutrality stakes?
In short, the answer is YES – it is likely that the growth of streaming services will raise net neutrality stakes. Here’s why:
Until only recently, major content providers like CBS and HBO did not have to ponder much about net neutrality owing to the fact that internet was far from being their primary mode of distribution. However, with the launch of their proprietary streaming services, the equation will definitely tilt in the opposite direction and these companies will start pressurizing the likes of Comcast and Time Warner to treat all traffic equally.