One hears a lot of chatter these days that video streaming bundles are the new cable TV. No doubt, it is a substitute or replacement product for subscription TV, to a growing extent. And yet the allegation that streaming is “becoming cable TV,” often uttered as a negative, might miss important elements of the shift.
Cable TV was initially a subscription-based way to watch linear broadcast TV for rural residents. Later it had appeal for metro-area residents as a “more choice” vehicle. But all those new and specialized content formats remained linear.
On-demand consumption of movie and other pre-recorded content was not possible until the advent of the videocassette recorder and the business of video rentals. In one sense this also was an extension of the “more choice” shift of consumption patterns.
But that arguably was secondary. The primary shift was from linear to on-demand consumption, a trend that continued with the availability of DVDs and then video streaming services. It is not insignificant that Netflix began life as a video rental retailer before making the shift to streaming delivery.
On the other hand, streaming services are adding more exclusive “live” content as well, largely because of the customer interest in sports programming, for example. Such content aids customer acquisition and retention in the same way that other exclusive content creates differentiation and value.
All that has financial implications for broadcast, cable TV and video streaming industries, as broadcast TV and cable TV advertising revenue shifts to other venues; cable TV subscriptions decrease and streaming subscriptions increase.
On the other hand, customers can use DVR capabilities to create a sort of on-demand capability for linear broadcast and cable TV programming as well.
The point is that streaming video bundles are not the "new cable TV." Both cable and streaming are about content choice. But all forms of broadcast TV are essentially linear, with a DVR overlay. Streaming bundles remain an on-demand value proposition; the latest evolution of on-demand video. That remains true even as streaming services add some "live" programming as well.
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