The news yesterday from HBO that they will be offering online subscriptions to their service rocked the TV world. The first of the major TV studios announcing that they will be taking steps to deliver their product straight to consumers without the need of a cable or satellite provider as a middle man. Now today, CBS has followed suit and announced their own streaming service that will allow people to subscribe directly to CBS to get programming straight from the network. Other networks are not far behind and have their own plans already in the works. The magnitude of these announcements cannot be understated. We are entering in to a new era of TV that we haven’t seen since the advent of cable TV.
What does this all really mean though? Are things really going to change that much? Will things get better or worse for TV viewers? What does the future of television really look like? Well. I think it looks pretty good. Here are some things that I think you can expect to see in the future of television.
1. We are entering a 2nd golden age of TV
We are about to see a space race of kinds kick off in the TV world. If studios are going to be more dependent on actual subscriptions, then they are going to have to provide content people actually want. HBO is already widely viewed as the best TV studio but people are coming after them. We are going to see competition between the top studios get even more stiff. The success of Kevin Spacey on Netflix’s House of Cards and Matthew McConaughey on HBO’s True Detective show that quality TV can be made with big stars. Look for more Hollywood people to make the jump. The TV studios are now more like movie studios than anything else and the people in Hollywood know it too. We are going to get the benefit of the fight between studios and of the ego’s of Hollywood stars. Everyone will want to be on the best show on the best network. We are going to get some good TV from this.
2. TV costs will drop (for a while anyway)
The cable and satellite companies hold all the power right now. If you want HBO, you are probably going to pay around $18 a month to get it. HBO only gets about $8 of that fee for each subscriber. Right now, if you want HBO, you don’t have a choice. You are going to pay it. Come 2015, you can cancel your HBO service through your current provider and just sign up directly with HBO. We don’t know their price yet, but CBS is saying they will be charging $8.99 a month. I imagine HBO will be somewhere in that neighborhood as well. You will already be saving money. It won’t end there. The cable and satellite companies are going to be forced to unbundle much of their programming. Right now you have to purchase packages of channels. If you want ESPN, you are going to have to get 50 other channels you really don’t want. You don’t have a choice. That is going to change. I would be willing to bet that the cable and satellite companies are going to start to offer more a la carte offerings to keep their subscribers. Before, they had the power. Now they don’t. That is going to benefit us the consumers, for a while anyway. I’d expect after time that prices will climb for stand alone services just like cable prices have gone up and up and up. If HBO gets people signed up at one price, don’t think they won’t try to get as much as they can. For the short term anyway, we will see a reduction in costs.
3. The fight over net neutrality is going to get very ugly
You probably haven’t paid much attention to the net neutrality fight that has been ongoing for the last couple of years. On one side are the people who say the internet should be free and open and all data that moves across the internet should all be treated the same. On the other side are those who say that companies have spent a lot of money on the infrastructure necessary to provide internet service and allowing bandwidth hogs like Netflix to clog their lines without penalty isn’t fair. This fight is going to get kicked in to overdrive now. Comcast is not only one of the nation’s largest cable providers, they are also one of the biggest internet providers in the country. The move by HBO and others to cut out middlemen like Comcast is a direct threat to Comcast’s business. They are not going to stand by idly and just watch that happen. They will be pushing hard for the passage of laws that will allow them to charge for use of their internet infrastructure. If that happens, the future will be that sure HBO can offer their product directly to consumers over the internet but Comcast is going to throttle that traffic to make it slower. Unless of course HBO pays a fee to Comcast to ensure that their traffic is treated fairly. HBO is counting on winning that fight. Comcast and others will be spending a lot on lobbyists (they already have) to make sure that they win. The battle is at this point still up in the air.
4. The end of the DVR is in sight
What’s the best part of having a DVR? Not having to watch any commercials. Most Americans now, except for CBS viewers who can’t figure out how to work their DVR’s, don’t watch anything but sports live. We are mostly watching shows on our DVR’s because we can skip commercials. So many people are doing this now that the Nielsen company now has specific ratings that include DVR watching. The DVR is a fantastic invention. For me, I think as humans, we have the wheel, flight, air conditioning, the pizza roll, and the DVR as the greatest inventions of humanity. The time of the DVR is coming to an end though. Companies are going to work to get people off those devices specifically because commercials are being skipped.
If you sign up for a subscription service, you will be beholden to that service and you will watch that service in whatever way they choose to deliver their product. Right now, only Hulu still forces people to watch commercials. That is going to change. Don’t think for a second that anyone is ready to walk away from the billions of dollars in revenue that are generated by advertising. That just isn’t going to happen. HBO themselves said they will be looking for ways to work with their current partners and CBS has already said that their streaming service will include commercials. The only thing stopping the full return of commercials to the front of your eyeballs is that you can still use your DVR to record shows and then skip the commercials. That device will have to go. I believe that is going to happen.
5. Movie studios will follow the TV studios in to subscription services
Is there anything more old-fashioned than being forced to go to a movie theater to see a movie? Why do we still do it? The tickets are outrageously expensive and you need to have a home equity line of credit to even think about buying any food at a movie. Hollywood has had a rough time getting butts in to seats in movie theaters and, they are starting to wonder why they have to pay distribution costs, marketing costs, and why in the world they have to share in any of the ticket sales with the theater companies. That is going to change. Look for movie studios to also cut out the middle man and go directly to their consumers. This won’t just apply to new releases. Studios are going to take a look at why they are allowing their products to go to places like Netflix and Amazon when they can just do it themselves. Netflix has seen this coming and it’s the main reason why they are shifting their focus in to original programming. The movie studios are going to take back their products, both new and old.
Overall, I think things are going to be good for us. We are going to have lots of options and will have much more control over what kinds of entertainment we pay for. I think we are going to see some very good TV getting produced in the coming years but that doesn’t mean there won’t be bad TV. Reality TV like the Kardashians is incredibly cheap to produce and for some reason, people still watch. That kind of stuff is not going to go away. The good news though is that kind of stuff will be out there for people who want it, and those who don’t won’t have to support it with any money.