Cable TV Viewers Flock to Web TV, Cable Ad Revenue Down

Chris Greenhough

Not before time, it seems certain television executives are being punished for what I (and many others, apparently) view as an outdated media model.

Crain's notes that cable and satellite subscribers are leaving in droves, with the biggest subscriber loss ever taking place in the second quarter of 2011. As subscribers are heading for the exits, so are the advertisers, with cable TV ad revenue down 2.8% in the same period.

Video streaming services such as Hulu and Netflix, meanwhile, are thriving, with younger viewers in particular watching less and less traditional television. Firms such as Roku and Boxee have developed set-top boxes that can bring the Web straight to TVs - importantly, these come with no monthly charge.

Such convergence seems to be a broadly positive development. As cable subscriptions fall and the digital revolution grows, programmers will be under increasing pressure not to keep new content to themselves. As Gene Munster, an Internet analyst at Piper Jaffray, explains:

"There are a lot of forces putting pressure on the living room. The genie's already out of the bottle from a consumer experience point of view."

All of which points to one thing: sooner or later, evil multichannel subscriptions are going to be a thing of the past, replaced with a sleek, consumer-friendly system that lets us watch stuff when we like, with à la carte pricing that means we don't have to subsidise the 800 channels we'll never watch.