Multiple system cable operators (MSOs) have been the dominant players in the pay TV world for decades. Over the years, they have been joined by satellite providers, telcos, and now a host of digital distribution vehicles.
But you don’t see much change in the way investors feel about such once cable-centric companies like Comcast, Charter and Cablevision -- because of their growing businesses like broadband.
Broadband is of key interest to any TV content provider, traditional or new. Companies like Netflix are increasingly realizing that they need better fast-lane access to the digital broadband pipes now controlled by the big cable-centric companies. Others will head in that direction as well.
Cord-cutting? Sure, people in the future will continue to look to save on pay TV content. But running their Internet service provider for their favorite “Big Bang Theory” or “Top Chef” episode won’t be the answer.
Content providers will figure out how to control programming from getting into the wrong hands. If that doesn’t work, they’ll look to transform themselves into new kind of cable networks – as the broadcast networks will probably also do if over-the-top distributors like Aereo get their way.
But just to be clear: Major content providers like the broadcast networks won’t be cheering for an ailing cable industry, which will have under 50% share of the market in four years.
They’ll want companies that are healthy enough to pay whatever carriage fees they’ll demand.
They’ll want a variety of strong, competing pay TV providers -- traditional linear, video-on-demand, digital or otherwise -- competing to carry their premium programming. On the flip side, pay TV and content distributors will try to leverage their way to a stronger new kind of market share.