I bash Comcast pretty regularly but that doesn’t mean I think everything wrong with the cable industry is Comcast’s fault. In fact, I think Comcast is right when it says the ridiculous increases in cable prices over the past several years have been driven primarily by content providers jacking up their rates for the right to carry their shows. If you want an illustration of how this works, look no further than a new New York Post report about cable networks’ furious reactions to Comcast breaking up its giant, pricey bundles of channels into smaller, more affordable ones.
Essentially, Comcast has been ripping up its bundling agreements with media companies and is now tearing out some channels from its main bundles. The idea is to give people more options when it comes to subscribing to the channels they want to watch, but media companies are hopping mad about it.
“This action is in direct violation of our agreement and will increase costs for customers who will now have to pay more for networks that were previously included in less expensive packages,” media giant Viacom said in response to Comcast’s actions.
Here’s the thing, though: Comcast is just doing what customers want. The traditional cable bundle has really been coming undone in the past year as more and more premium channels have created their own standalone streaming options that don’t require a cable subscription. Comcast recognizes this and is thus trying to keep its subscribers by offering them pay TV packages that cost less and include a more focused package of channels.
Or put another way, Comcast is analyzing the current market landscape and responding to its demands. This is exactly how a well run business should operate.
But it seems many cable networks are still in deep denial about the future of television, which in the coming years will be watched primarily on demand and over the web instead of linearly over a dedicated cable network. And while I would never claim that Comcast has its hand on the pulse of consumers’ wishes, I do think the company at least recognizes this reality. The content providers who are clinging to the past, however, are in for a rude awakening.