# Does Online Streaming Threaten the Future of Cable?



## David Bott

*Does Online Streaming Threaten the Future of Cable?*

When Netflix outbid networks like AMC and HBO for the exclusive rights to political drama "House of Cards," it set a precedent, in which streaming services were taking big steps to change the way we use content. According to Complex, Netflix spent $100 million acquiring the show, which stars Kevin Spacey and is produced and directed by David Fincher. It was a move that Netflix, or any company like it, never made before.

So did it work? Netflix is keeping the raw data to themselves, but saying "House of Cards" is the most watched show available right now. So to call it a world-wide success wouldn't be too much of a stretch. The promising outcome from "House of Cards" is opening a window of opportunity for other companies to follow, and if the other networks knew what was good for them, they would be very, very concerned.

*A Brand New Format*

Unlike traditional broadcast or cable TV, Netflix released the first season of "House of Cards" on February 1 in its entirety. That lets the viewer watch the show from beginning to end at their own pace; whether it's over the course of a few weeks or an all day binge. Even with cable's on demand services, this is impossible for them to accomplish because of the advertising revenue they depend on.

According to What Culture, Netflix will launch the fourth season of "Arrested Development" in one block of episodes, as well. Fox canceled the cult comedy in 2006, and the anticipation of its revival assures Netflix that this new way to create content is a hit. The format could be appealing to subscribers who only want a month or two of service to watch a specific show. A month of basic satellite television runs about $30, according to directtvdeal.com, whereas Netflix is $7.99 a month.

*New Frontier for Kid Shows*

Amazon Studios, Netflix's most competitive rival plans on making original content of its own. According to CNET, Amazon is partnering with the creators of "Blue's Clues" and "Sid the Science Kid" to produce pilots for five original children series by its own streaming. Children's programming is still a new territory for streaming, and Amazon hopes to be the first to capitalize. A hard date isn't set for the new shows, but the 11 pilot episodes will be released sometime in 2013.

*Amazon's New Push*

Amazon isn't settling for the success of a few children's shows. Netflix's streaming rival launched big-named pilots with recognizable cast members, like John Goodman, to test audience reaction for new shows. According to the L.A. Times, Amazon will use the ratings of each pilot as a guide to determine which shows get the green light for full seasons. It's a different approach compared to Netflix, which went all-in on "House of Cards" as the future of the company. But the variety could give Amazon the best chance of finding content to compete with Netflix's success.

Cable's reaction to online's success has been quiet so far. Premium networks like HBO still offer their content online (HBO Go), but only for existing subscribers. Come awards season, if Spacey and "House of Cards" steal some statues away from the usual winners, the big players will need to seriously reconsider their game plan.


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## SayWhat?

As has been discussed here many times, cable, satellite and broadcast need to adapt. But just as importantly, the ISPs need to adapt as far as speed, capacity and affordability.


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## Stewart Vernon

Companies do need to adapt... but consumers/viewers will have to adapt too. If commercial TV goes away, be prepared to pay more to watch your shows. There are a lot of consumers out there who think they should be able to watch free (or very cheap) programs, who don't seem to grasp that networks will not pay to create shows if they aren't getting money from somewhere... so as advertising goes, so will programming OR higher bills will be coming sooner rather than later.


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## SayWhat?

And on the web, it's harder (though not impossible in most cases) to block or skip through commercials.


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## djlong

I wonder what the ripple effect would be if HBO suddenly opened up HBOGo to everyone who wanted to pay $10/mo for it.


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## photostudent

The cable companies are not threatened by the Internet... They own it! It does not matter which pocket they put the money in. Might be a different story for DBS providers though.


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## bidger

photostudent said:


> The cable companies are not threatened by the Internet... They own it! It does not matter which pocket they put the money in. Might be a different story for DBS providers though.


That's what sprang to my mind when I saw the thread topic.


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## RasputinAXP

djlong said:


> I wonder what the ripple effect would be if HBO suddenly opened up HBOGo to everyone who wanted to pay $10/mo for it.


I think we'd be more likely to see $20 a month for HBOGo as a standalone.


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## Laxguy

If the title read "....of cable TV" I might say yes. But the same folks @ cable TV are the ones @ cable ISP, and they'll make their nickel one way or the other. 

I bet all major providers are contemplating their own productions just in case.


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