/// Last Year’s Tax Rate May Not Survive in 2013, but Your Cable Service Probably Will

January 5, 2013  |  All Things Digital


Image copyright Vicki France Now that the fiscal cliff has collapsed, we can be pretty certain our tax bills are going up unfortunately. And a Reuters report in August suggested that cable/satellite TV subscribers are dropping like flies, with the industry losing 400,000 customers in just seven months. But as Peter Kafka aptly countered , these numbers are based on quarterly results not annual. And when you look at all of the data in the market, it is clear that paid TV is hardly dying. In spite of a soft economy, with about 14.5 million unemployed Americans and 8.2 million under-employed , people are still holding onto paid television, and actually consuming more video than ever before. Netflix has crossed over 30 million subscribers in the U.S., Hulu is approaching three million, but only 2.65 million people in the country “cut the cord” from traditional paid TV service. In fact, Americans are still spending about 33 hours a week watching traditional TV (that’s 4.5 hours a day!), compared to 27 minutes a week of streaming video . So where is this TV revolution the pundits have been blogging about?? Maybe we need to stop thinking of cable TV the way we think of phone service. It’s easy for technologists to predict that streaming video will do to cable companies what Skype did to the telcos, but I propose a new lens to filter TV technologies: an App that replaces broadcast television is like saying Yelp should replace Taco Bell. My contention is that a “TV revolution,” as some are calling it, is not in the cards. Instead, I see a “transformation” of TV taking place, and while transformations are far less sexy to blog about than revolutions, I think this one could be pretty fun and pretty lucrative for tech companies that get it right. First, let’s clarify “transformation” versus “revolution,” in the context of Web services and Internet Apps: Revolutionary apps fundamentally overthrow an analog provider with a digital alternative. Examples: Skype is a substitute for your landline. iTunes is a substitute for Virgin Megastore. LinkedIn is a substitute for schmoozing. Match.com is a substitute for my pushy (but well-intentioned) auntie in India. Transformative Apps make analog providers a more pleasing or user-friendly experience. Examples: Fandango makes going to movies easy and predictable. Foodspotting makes finding the perfect entree a delightful experience.

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Last Year’s Tax Rate May Not Survive in 2013, but Your Cable Service Probably Will


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