How Google Could Break Down Cable TV’s Door

iStock_000008491057XSmallCable TV is ripe for getting ripped apart, and it looks like Google could be the one to do it.

All media is just data. And that means the cable TV business as we know it makes no sense—a business essentially held in place by legal duct tape, not market forces.

Where I live in New York, we have Time Warner Cable. It works like the cable service in most every town. One cable line comes into the house, but then you can buy three different services: a constant firehose of video content we call cable TV; a broadband Internet connection; and a voice service we call the telephone.

The cable company charges a separate amount for each. In fact, by many people’s standards, cable companies charge a lot. In consumer satisfaction surveys, cable companies rank lower than just about any industry in America—generally lurking around the bottom along with airlines.

If you could wipe out cable TV and start from scratch, what would be better? Well, all you’d need for your house would be one big fat data connection, for which you’d pay one price. Then through that data connection, you could subscribe to whatever services and content you wanted.

When you think about it, it’s really about folding television into the Internet.

TV networks would become services you’d subscribe to—mostly for live stuff like sports and news. Produced programming would come in packages that look more like Netflix streaming. As Netflix is proving with a series like Arrested Development, why would anyone want a TV channel anymore that only sends certain programs at certain times? The whole raison d’etre for DVRs is to help us fix a programming tradition that we hate!

Voice calls, too, would become an app through your data pipe. The old idea of a “phone line” is disappearing anyway.

In communications circles, there’s a term for this kind of arrangement: open access broadband. It separates the pipe from the content or the services that flow through it. If Time Warner Cable owns the pipe, it certainly could offer its own package of content over it—but so could others, even cable companies from other cable territories. That, in itself, would break decades-old sacrosanct cable gerrymandering and unleash much-needed competition to win customers.

A recent report from the Organization for Economic Cooperation and Development (OECD) lauded open access broadband as “crucial for promoting competition, greater consumer choice and lower prices.” It’s been a great success in some countries, like the U.K. In the U.S., going back to around 2000, a few efforts have been made to build open access broadband in major cities—all thwarted.

This is where Google comes in. This week, Google introduced Chromecast, a $35 device that plugs into any TV and allows users to stream video directly to TV screens from many devices or from the cloud. And according to recent reports, Google executives have been visiting media giants to talk about licensing TV programming or even whole TV channels like CNN or AMC, which it would then offer over the Internet.

This is something new—beyond the on-demand streaming of Netflix or Hulu. It would put Google directly in competition with cable companies, stressing the cable TV structure. If consumers could, for instance, buy just the cable channels they like from Google, why would they want to continue to pay to get SoapNet or Jewelry Television?

(There’s an old argument from the cable industry that its bundles of channels allow a diversity of programming—a popular ESPN helps subsidize a Jewelry Television. But plenty of diverse video content has flowered on the Web, showing that argument to be a big fat fiction. Consumers should pay for what they use, not for what other people might want to use.)

Apple is messing around in this space, too. But Apple really has not been a disruptor in media—it tends to work with existing players to make them comfortable with going digital. That seems to be its strategy with Apple TV. It will be interesting to see whether that approach, in the long run, leaves Apple on the right or wrong side of TV history.

In the meantime, there’s another force on the horizon: wireless. New generation cellular networks can increasingly handle streaming video, and the march of technology will clearly take wireless to a place where it could be used to offer a pretty compelling version of a cable TV service. That kind of data pipe would be everywhere, all the time.

Media is data, and it can flow through any data connection. The only things standing in the way of a Google cable-like service are the contracts and long-standing business practices set up to prevent it. But the Internet tends to knock those down like floodwaters hitting an old barn. Just ask the music industry, the long-distance telephone industry, the book industry.

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2 Responses to “How Google Could Break Down Cable TV’s Door”

  1. jcadmus says:

    I think it’s as much about changing viewer behavior as anything else.

    To your point, DVRs allow us to watch what we when we want, within limits, and even limit our exposure advertising. And we like that.

    However, some of television’s appeal is its “in-the-moment” nature — whether you’re watching the Superbowl, the Grammies or and end-of-season (or series) finale, these things tend to take on an “event” quality, with people arranging parties and such to share the experience as it’s happening.

    I mean, you could do that with a DVR — watch the event a few days or weeks later — but you’d lose that immediacy of the experience. And how would you get everyone to shut up about it until then so as not to spoil it?

    • RAL says:

      Would be a disaster for anyone who loves movies or TV! Streaming at la Netflix, in the best of circumstances, presents an image that is far inferior to what cable or DVDS provide. Streaming pay offer lots of content but awful quality!

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