Today the CEO of Netflix said something kind of crazy and probably true. On the smart TVs and set-top boxes of the future, he said “Your cable provider will be an app.”
Here’s why that matters: History has taught us that at the moment at which the means of distribution are separated from the content they distribute, old monopolies break down, assumptions are thrown out the window, revenues tank, giant companies crash and burn and from their ashes are born entirely new ones.
We all know what happened when the internet replaced the newspaper as the primary source for written news – and just as importantly, the many forms of advertising that used to accompany it. Now news-gathering outlets realize that the fourth estate had always been subsidized, and the failure to find an alternate source of subsidy means that the contraction in that industry has been profound.
The same thing is about to happen to cable networks. Actually, it’s already happening: In 2009, Time Warner and Time Warner Cable split, which means the HBO and all the other Time Warner studios are no longer owned by one of the companies that controls the physical infrastructure to deliver them. Comcast, on the other hand, still has significant stakes in a number of content creators.
So if cable becomes just another app on your TV; another icon on your Google TV-enabled set-top box or Roku or Apple TV or Android-powered Samsung whats-it, the monopolistic connection between the owner of the distribution infrastructure and the provider of the content that populates it will be broken, sort of.
This is just one of the reasons why ‘net neutrality is under constant threat, by the way: Because cable companies are also delivering the overwhelming majority of the broadband internet service in this country, it’s in their interest to privilege their own content, and especially to make sure that it doesn’t become just another app, indistinguishable from all the other on-demand content on our televisions.
God forbid that content should have to compete on its own merits. Can you imagine what that would look like? The money would flee – more for Google and its successors, we can suppose. More amateur content, lower production values, a fragmented audience. In other words: Television would finally start to look like the web.