The cable guys, along with some friends, are spending $30 million to accelerate their own demise. Serious movie buffs couldn't be happier.
Cable TV providers including Time Warner Cable (NYSE: TWC) and Comcast (Nasdaq: CMCSA) are teaming up with leading movie studios such as News Corp.'s (NYSE: NWS) 20th Century Fox and Lionsgate (NYSE: LGF) to promote the concept of watching movies on demand through your cable box.
A combination of print, online, and TV ads show how happy consumers can get their favorite movies delivered right at home anytime they like, and often on the same day as the retail DVD release. All it takes is a couple of clicks on your remote control.
I love on-demand content. With this model, you can get your entertainment fill without schlepping down to the video store, without waiting for the next Netflix (Nasdaq: NFLX) delivery, and without even bothering to record stuff on your TiVo (Nasdaq: TIVO). Time slots and schedules are so last millennium. From that perspective, the cable industry is doing its customers a favor by promoting the availability of video on demand, and it does make sense to drive subscribers to pay cold, hard cash for on-demand movies rather than turning elsewhere.
But the quicker the average American gets used to the convenience of on-demand video, the swifter the demise of traditional cable packages. I can't help but assume that an industry that's pushing for more use of on-demand features will also beef up the library of available content. If you build it, they will come, and I for one wouldn't hesitate a heartbeat to drop a few layers of programming packages if I could just get the same content through the on-demand menu system.
And that's just the beginning of the end. The next TV set you buy might be able to stream videos from Netflix, Amazon (Nasdaq: AMZN), YouTube, Hulu, and a gazillion other online sources -- and a modern Blu-ray box certainly will. The interface will feel familiar to cable customers already steeped in on-demand content, and in my mind, it's only a question of time before the cable box becomes nothing more than a nice Internet connection for your TV.
That's the road the cable industry is walking down, and it's paved with good intentions of quality customer service and short-term profits. It's also tantamount to a suicide note. The next generation of entertainment providers will shake out from a bunch of content-organizing powerhouses like Amazon, TiVo, and Netflix.
