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Saturday, February 14, 2015

The Streaming Time Bomb

Like many others, you may think streaming TV is the future.
Maybe it is.
But maybe it's a time bomb that will blow in our face in the very near future. Here's why.

Heard about the cord cutters? These are the folks that cut cable TV and turn toward streaming television. Watch TV via the web, and save big bucks on their cable bills. It certainly is an awesome option, after all cable TV is damn expensive. Can't blame cord cutters for sure!

Slowly but surely, more and more people abandon cable TV subscriptions, leaving these providers with lesser and lesser revenues. Who cares, they make billions, right? Time for them to give up and disappear from the face of the earth, right?

It's not that easy sadly. Because, see, these cable TV providers are the same folks giving us high speed internet. High speed you need to stream video. What happens in a situation where everyone moves to streaming TV, and the providers end with much lesser revenues to maintain the network?

Maintaining a nationwide content delivery network requires a lot of investment, and that money comes from the cable TV providers, from your cable TV subscriptions. These societies need to make money, they are public companies, listed in stock market, they have investors buying shares, they have banks investing money, and so on. If revenues shrink, the value of the shares shrink, and investors, banks, everyone take back their investments before it's too late. That is how large societies collapse in a matter of weeks.

Cable TV providers are not exempted from that scenario. If cable TV business goes down, the streaming TV business model will go down too.

The Google network.

You probably heard about Google running cable network in some select US cities, and offering low cost internet access, with options for people who want to watch TV via streaming. Basic packages start at $0, but if you add all the same services you get from current cable companies, unlimited internet, phone, basic TV and ala, you end up with pretty much the same price, roughly between $80 and $120/month.

Maybe, after all, the pricing of today's cable companies is right, and it's really what it costs to maintain a decent service.

sv bell

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