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Is Cablevision really ready to give up television?

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Cablevision (S CVC) CEO James Dolan may go down as the biggest cord cutter in cable TV’s history: The elusive chief executive of the nation’s fifth-largest cable operator told the Wall Street Journal this weekend that Cablevision may one day drop the television part of its business, and concentrate on just selling broadband instead.

Dolan also told the Journal that the pay TV industry is living in a bubble, and its customers aren’t interested in the big bundles offered to them anymore, with younger viewers increasingly turning to online video instead. Case in point: Dolan’s own kids prefer to watch things on Netflix (s NFLX) instead of cable.

Does that mean that Cablevision is going to give up on TV any time soon? Probably not. The company is still investing a lot in video services, including its own cloud DVR, which it successfully defended in court.

Dolan’s comments should also be seen in the context of the ongoing conflict around retrans fees, which led to the current blackout of CBS on Time Warner Cable. Broadcasters and cable networks want more money from cable operators for their programming, which in turn are trying to get new concessions from programmers.

The whole conflict involves a lot of posturing, and led to Cablevision suing Viacom earlier this year in an attempt to break up the network’s bundles, or renegotiate a cheaper price. Saying that you don’t need TV all that much may be another attempt to strengthen your negotiating position.

That being said, Cablevision doesn’t seem to be in the same us-against-the-world mindset that grips some of the other cable operators. For instance, it was one of the first cable operators to accept Netflix’s offer and install local OpenConnect content caching boxes inside of its network to speed up video delivery, something that has resulted in Cablevision being second only to Google Fiber in Netflix’s monthly ISP speed index.

So if Cablevision did ever give up its TV business, it may actually have a broadband offering worth its customers’ money.

Image courtesy of Flickr user El Gran Dee.

2 Responses to “Is Cablevision really ready to give up television?”

  1. Virtuous

    The cable channel model is outdated. Many people only watch a few shows. Why should they pay for a whole channel when they watch it only a 1 or 2 hours a week? Right now many people only watch shows recorded on their DVRs. They could just as easily watch those same shows on demand.

  2. keninca

    Since most networks want to charge cable companies for the right to distribute their content to subscribers, the cable companies are assuming risk by deciding which channels to allot to their finite number of channels. They would be better off just selling bandwidth and letting the networks buy access to their network, and sell their content on demand. If there were no channels, there would be more bandwidth for on-demand content, and customers would determine the value of content, not the networks.

    The first step in moving to an on-demand model would be to offer a la carte programming. Cablevision should only offer those channels which are free in their basic TV package, and then let customers choose what channels they want to pay for. There would be no CBS blackout. They would also get on-demand access to whatever programming networks (like HBO, or even Netflix) choose to offer over the cable broadband network. It would be the market, without illegal bundling, at work.