In a move that’s sure to be considered as brilliant as slapping the plans for a Death Star into a small R2 droid to deliver them halfway across a galaxy far, far away, the U.S. cable industry is setting a research center in the heart of Silicon Valley to see if it can tap into the same innovation and expertise that gave us Twitter, Facebook and Lolcats.
Unfortunately, the plan may turn out to be closer to entrusting the fate of the Old Republic to Jar-Jar Binks.
The Idea
On paper, the idea seems sound. The nonprofit research and development consortium known as CableLabs will seek to connect cable industry providers with the myriad of private and academic resources that resides in Silicon Valley, with the hope of figuring out how to “re-energize” the cable industry, according to Reuters.
“The industry needs to ‘get re-energized,’ said Jerald Kent, chief executive of Cequel Communications and co-founder of Charter Communications. ‘Part of the message is this is not your grandmother’s cable business,’ ” Reuters reported.
Given that my grandmother’s cable provider charged an arm and a leg just to deliver Chicago broadcast stations to my Northern Indiana home, and now I am charged at least a major organ to watch such cable-only gems as Real Housewives, I am pretty sure we’ve already figured out that cable has changed. But Kent’s remarks reflect the fundamental problem with this new technology center’s approach.
The Fail
This is one case where it seems pretty clear that the cable industry’s problem is not technological in nature, and a technology fix is not going to be the solution.
There’s nothing wrong with the basic cable technology: I press a button and magical pictures and sounds come out of a black rectangle in my living room. Pretty straightforward. And if the cable companies want to deliver content on second-screen devices, I’m pretty sure they could do that now. The fact that they typically own the Internet delivery system in a given location is a big help, too.
It’s not better technology that has led people to “cut the cord” to their cable provider and watch Internet-delivered media instead. It’s the cable bill. More specifically, it’s the cable bill that keeps getting bigger to deliver a lot of content people don’t need or want.
Some of this is not the cable companies’ fault: Media creators often force the cable companies into channel-bundling deals in order to provide an outlet – and a business model – for their less-popular channels. “You want the Disney Channel at a reasonable cost?” the conversation might go, “Then you have to take all of these other Disney-owned channels, like ESPN3.”
But by continuing to participate in this system, cable providers are alienating customers. With digital over-the-air signals from local stations and quality content delivered on Hulu, Netflix and other streaming services (for a lot less cash), cable’s problem is not technological.
Can Cord-Cutters Be Lured Back?
Speaking as someone who has cut the cord on cable TV, I can promise that if cable were to deliver TV channels to my home in an affordable, a la carte fashion, I would be back in a heartbeat. And I bet millions of other former cable TV subscribers would come back too.
It’s possible there’s a surprise lurking inside the cable industry’s sudden embrace of technology and Silicon Valley. Perhaps the combination will dream up some new lateral solution that will give cable TV a better market opportunity.
But I don’t think so. Fundamentally cable has a business-model problem – not a technology problem. And it will take a business-model solution to stem the bleeding of customers cutting their cords.
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