Telecommunications Convergence

Shani Hilton writes about how a growing number of people are dropping their cable subscriptions, a trend she thinks will continue:

Many cable providers have been raising prices, and right now, they can afford to do so because most subscribers haven’t even considered other options. But as many other industries have discovered, this isn’t sustainable in the long-term. The share of live-TV watchers is going to shrink — and if live HD sports become widely available on the internet, it’s a wrap — and many distributors will find themselves out of a job. I could be wrong, but I just don’t see how they can save themselves.

I think that’s both right and wrong. Certainly in a world of much-faster broadband internet there’s no particular need to be a cable subscriber. But I get my internet access from my cable company, Comcast. The other major option would be to get it from Verizon, the major local phone company. But of course today you can also get phone service from Comcast and Verizon is increasingly rolling out Fios cable television. And for my part, I don’t get landline service from Comcast or Verizon, but I do want a landline so I use Lingo’s VOIP service over my Comcast internet connection.

Which is just to say we’re seeing not the death of cable, but the convergence of previously distinct telecommunications services. That’s a problem for telecom providers not so much because people will drop cable, but because the combined “telecom services” marketplace is a more competitive one than the segmented “cable” and “phone” marketplaces were/are.