It was only a matter of time before the internet reshaped television as we know it. Cable providers recognize this shift and are working to transform their traditional business models into more dynamic technology-driven services that embrace the web instead of treating it as a threat.
New research from Leichtman Research Group underlines this change: for the first time, broadband subscriptions have edged past cable TV subscriptions. The difference is narrow—about 49,915,000 broadband subscribers versus 49,910,000 cable subscribers—but that margin is likely to widen in favor of broadband as consumer behavior continues to evolve.
To retain customers, cable companies have historically relied on exclusive content deals for lucrative categories like sports, news, and entertainment. With broadband, providers don’t need to supply or package that content; they act primarily as carriers delivering media from internet services such as Netflix, which have been steadily eroding cable’s traditional audience while investing heavily in original programming.
As Recode’s Peter Kafka observed, many industry insiders believe cable operators might welcome a shift from video to broadband revenue: broadband service margins are often healthier and face far less competition than video subscriptions.
However, that transition raises concerns about internet openness. Practices like offering “fast lanes” to streaming services that pay for prioritized traffic can threaten net neutrality and disadvantage smaller competitors that cannot afford preferential access. Recently, Time Warner Cable became the last of the major U.S. ISPs to reach an agreement with Netflix to improve streaming performance, highlighting how network deals can shape viewing experiences.
Traditional live television isn’t going away overnight. Many viewers still prefer scheduled programming and the familiarity of their TV setups. Yet as online platforms adopt always-on, personalized delivery models, cable subscriber numbers are expected to decline further. Streaming services offer greater variety and on-demand selection; for many users that is more appealing, though some features—like automatic continuous playback across episodes—vary between platforms and can affect viewing habits.
Looking ahead, personalized internet-based TV channels will likely define the future of television: curated, algorithm-driven streams that adapt to individual tastes and viewing patterns, accessible across multiple devices without the constraints of linear schedules.
The full Leichtman Research Group report is available from the source cited by the original research announcement.
Do you think this marks the beginning of the end for traditional cable TV? Share your thoughts in the comments.
For further discussion about internet-based television and connected living, see the Connected Living track at IoT Tech Expo Europe, held in London’s Olympia on 2–3 December 2015.