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The Future of Internet Cable, Part I

The average person is paying more than ever for cable or satellite.

Cable and satellite TV companies are unpopular for good reason. Monthly charges are as high as a car payment with package deals requiring that we pay for a glut of channels we never watch. On top of that, cable customer service gets some of the lowest ratings of any industry. This is why an increasing number of people are contemplating cutting their cable in favor of selected Internet-based network transmission, e.g., Netflix, Hulu, etc. However, this switch is happening at a slower pace than you might imagine. In fact, the attrition rate for cable is still only about 1% a year. So far, TV viewers are simply adding Netflix and other subscription services as add-ons to their cable and therefore paying more than ever for TV.

Tv cable and internet service provider options

In 2000, people watched analog TV via broadcast or cable signals. If you had internet service, you got it via your landline. With digital transmission, we are now accustomed to getting bundled TV, cable, and auxiliary wi-fi reception for all our screen devices. This includes much-improved fiber optic bandwidth with greatly improved picture resolution.

Unfortunately, we’re experiencing a glacial launch of 4K digital transmission (a revolutionary improvement over now standard 1080p) despite the fact that most higher-end new TVs are 4K ready. This is less a problem for satellite ISPs than for cable providers because with cable there are limits on bandwidth. The main reason for this impediment is that major networks require that cable TV providers take what they give them. Adding 4K transmission is a tight fit because each network demands a hefty amount of bandwidth to accommodate their analog and unpopular auxiliary channel transmission.

Cutting the cord

I have friends who ‘cut the cord’ several years ago and are happy with their TV viewing options. In fact, for those who don’t watch much TV, including many Millennials, this is a great choice. After all, streaming video now constitutes more than two-thirds of all internet traffic and many video snippets from popular shows are free to view online. Yet when cord cutters add HBO, Netflix and other individual pay-to-view options, the cost of those subscriptions quickly adds up.

While an increasing number of cable subscribers are looking for ways to jump ship, assembling a subscription-based array of channels requires a consumer to manage three or more different providers for service installation, billing and maintenance.

In my next installment, I’ll describe how some experts are forecasting a “great rebundling” of TV network transmission in the long term as media conglomerates and other entertainment stakeholders develop new strategies to regain profits they may lose in the short term from those who abandon cable

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