The murmur of the snarkmatrix…

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"The Problem With Cable Is Television"
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But, it turns out, the problem with television is sports:

The broadband business is doing fine, as costs are coming down. Cable executives do worry that if costs rise as they expect because of surging online video use, they will need to find some way to get prices going up the way they are used to in their video business.

The bigger question is what happens to the video business. By all accounts, Web video is not currently having any effect on the businesses of the cable companies. Market share is moving among cable, satellite and telephone companies, but the overall number of people subscribing to some sort of pay TV service is rising. (The government’s switch to digital over-the-air broadcasts is providing a small stimulus to cable companies.) However, if you remember, it took several years before music labels started to feel any pain from downloads…

The wedge that breaks all this may well be sports. ESPN alone already accounts for nearly $3 of every monthly cable bill, industry executives say. With all these new sports networks pushing up cable rates, at some point people who aren’t sports fans might start turning in volume to Internet services like Netflix. We’re not there yet, but looking at the industry in the last quarter, you can see the pressures building.

Fascinating (and quick!) look at cable companies’ businesses. [Everything in bold is my emphasis.]

The snarkmatrix awaits you

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