FEED: With your vast knowledge of the cable industry and its operations, what have you learnt that could be applied to today’s internet-based distribution?
HOWARD HOMONOFF: It’s hard to believe today, but the cable business was once the young upstart. In the US, it was originally just a means of sending signals to remote places, which regular broadcast couldn’t reach. Even as late as the sixties and seventies, there were millions of people who didn’t have access to television. Cable’s great innovation was to use its wires to create new programmes, not just retransmit what broadcasters were doing. First HBO, then a whole slew of networks came along to compete with broadcasting. Finally, cable became the major means for people to get channels. Broadcasters, like everybody else, became beholden to the cable industry.The gatekeepers were not the broadcasters any more, it was the turn of cable operators – satellite companies to a lesser degree. “THENTHE INTERNET CAMEALONG.THAT HAS BEENA SHOCKTOTHE TRADITIONAL SYSTEM”
That world of three or four channels went to a dozen, to 50, to hundreds. Its brilliance was the dual revenue model – people paid for cable, but were also willing to watch advertising. Then the internet came along.That has been a shock to the traditional system, with an almost infinite amount of content.You only have so many hours in a day, and no matter how much you multitask, there is only so much you can watch. Not only do consumers have all these content choices, but they can choose when to tune in. All of that has upset the two big pillars of revenue from the cable business I grew up in: subscription and advertising. I teach graduates, and nobody in my class subscribes to cable – even the older generation are dropping it for a smaller bundle, or no bundle at all. At the same time, it’s taken a big hit to advertising revenues.With consumers having so many more choices of what to watch and what platforms to use, you just don’t have the same level of concentration around the small handful of programmes that you used to have.
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