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Pulling the plug: What the HBO and CBS Decisions Mean for Cable TV

Traditional cable TV is unbundling before our eyes.

By now you’ve likely heard that, starting sometime in 2015, HBO will sell standalone subscriptions in the U.S. to its online streaming service, HBOGo. Twenty-four hours after the HBO announcement, CBS joined in with its own subscription-based service: CBS All Access.

The decisions by HBO and CBS are a harbinger for the future of bundled cable TV providers. And this new à la carte streaming model is driven by consumer demand. People are cutting and, increasingly, “shaving cords,” abandoning traditional cable TV for on-demand internet streaming.

Networks are also retooling their marketing strategies to appeal to a younger, stream-happy audience. ABC, for example, just hooked up with Google to customize the network’s fall marketing strategy on YouTube. “Just putting a TV spot on YouTube won’t work,” explains Google head of industry Rebecca Mall who, along with her team, is advising Walt Disney’s entertainment division. “The way TV networks typically market shows on traditional platforms doesn’t necessarily work on YouTube.”

As the ubiquity of online streaming services grows, consumers will continue to hold the remote in the cable provider relationship. Ultimately, though, cable TV providers are also internet providers. Consumers looking to cut the cable TV cord with Comcast, for instance, are still likely going to pay a monthly Comcast bill for internet access (unless they are one of the lucky few with Google Fiber).

This very well may be a silver lining for cable providers. Despite the fact that many consumers have already cut — or are shaving — their cable TV cord, cable providers still have an opportunity to understand and design viewer experiences worthy of a monthly cable bill.

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