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Are Cable Company Pay Models Traditional, or Just Plain Outmoded?

Features
by Chris Dorr
June 2, 2014 3:02 PM
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Comcast CEO Brian Roberts

Cable companies operate two distinct lines of business.

Traditionally they bundle and resell linear TV networks.  The cable company feeds these networks into our homes and provides the interface that lists the content for our selection.  The cable company pays each network a fee for each subscriber.  The consumer pays a monthly fee to the cable company.

The cable companies also provide high speed Internet access, known as broadband.  With this service, they do not pay any content providers for their channels nor do they provide a guide to the content that flows through the pipes.  They move the bits requested by the consumer as well as those bits she sends back out to the Internet.  And the consumer pays a monthly fee to the cable company.

One service allows you to navigate and view a predetermined, pre-purchased bundle of linear channels. The other service gives you a pipe and access to an infinite array of content.

In its traditional business the cable company is the ultimate gatekeeper. It determines what you can see and what you will pay. 

With broadband, the gatekeeper role disappears. Cable companies do not determine what you will watch nor do they charge you based on the content you watch.  

Some cable companies would like to change this.

Read the rest of the story here.
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