The cable industry’s huge incumbent advantage over upstart Internet video rivals is beginning to weaken.
It’s time for cable companies to fix their awful user interfaces, get their video-on-demand services in tune with this century, and dominate the digital living room — or risk increasing disruption.
The latest: The first deal to bring live, major league sports to a cheap, Web-only set-top box. Not a technology breakthrough, but the latest sign of cable’s grip slipping.
Roku, which sells a $99 digital set-top box for streaming movies and TV episodes from Netflix and Amazon, just announced it will stream Major League Baseball games in hi-def over the Internet for no fee beyond a MLB.TV subscription. Later this year, it plans to introduce more video and audio sources, becoming a robust “over-the-top” entertainment service. All this without a monthly cable fee — which mostly supports channels you don’t watch.
Fortunately for the cable companies, owning something like a Roku box or Apple TV is still very niche. Roku has hundreds of thousands of customers, we estimate, while cable TV has tens of millions. It will take a while for enough content to trickle onto the Web to make it a viable competitor to cable for most people. By then, companies like Roku could be out of business.
And, to be sure, the cable industry does have several built-in advantages: Owning the pipe that runs into your house; owning the set-top box already plugged into your TV; content owners that depend heavily on cable subscription fees for revenue, etc.
But speaking for ourselves, it’s now been 15 months since we dumped our $80/month digital cable subscription to become a “Hulu household.” Ever-improving services like Roku — and no visible progress from cable — give us no incentive to go back.
Business Insider Emails & Alerts
Site highlights each day to your inbox.