What happened to the TV revolution?

Courtesy Markets

In a blow to Americans who yearned to cut the cable, the U.S. Supreme Court ruled that online video startup Aereo Inc. violated copyright law by allowing subscribers to stream live over-the-air local broadcasts and record them from their devices. Broadcasters — Walt Disney Co.’s   ABC, Comcast Corp.’s NBC, CBS Corp. and 21st Century Fox— successfully argued that Aereo engaged in unauthorized exploitation of their content. 

Google Inc. announced Wednesday it would launch an Android TV set-top box to stream music, video games, movies and TV shows. But it also needs content from networks, and consumers still need an Internet connection — usually provided by cable companies as part of a bundle that includes TV. On Tuesday, Apple TV added the ABC News app, which viewers can watch live; it already has Watch ABC, Lifetime, A&E, PBS, History and Disney. Time Warner Cable recently updated its Roku app to include live and on-demand viewing and, in March, it redesigned the interface to make it easier to use — and resemble a tablet screen rather than complex cable TV listings; content includes HBO Go, and MLB.TV.

“The grandest dreams of revolutionizing the television industry have largely died, and they’ve been replaced with much more pragmatic but ultimately incrementalist solutions,” says Craig Moffett, senior analyst at Moffett Nathanson Research. Set-top boxes simply display Internet content more conveniently on TVs, he says.
 
While they make it easier to see content from other outlets, he adds, “The key to revolutionizing the TV experience hinges on the availability of content, and there is no sign that the media conglomerates have any intention of undermining their traditional TV businesses.”

Headlines about rampant cord-cutting are not backed up by the data, says Dan Rayburn, a principal analyst with Frost & Sullivan. “Are cable companies still having record profits? Yes. The industry has not lost more than 1% in any one quarter. People are saying cable is dead and broadcast is dead.” Online services, he says, are a complement — not a disrupter — to cable. Netflix (has over 31 million subscribers in the U.S., for example, versus HBO’s 28 million. Even though Netflix has had success with its own original series, Rayburn says most Netflix customers want to watch live television and also have cable. Time Warner Cable has more than 11 million subscribers and

Comcast has around 22 million.

U.S. pay-TV subscribers — cable, satellite and Internet protocol TV — rose by 202,670 during the first quarter, although cable subscribers alone in the U.S. fell by 132,330, according to recent analysis by global information company IHS Technology. The bigger cable players have been showing more resilience.