Rebel Finance - 12 Investment Revolutions by Ralph Edward Cope

Author:Ralph Edward Cope [Cope, Ralph Edward]
Language: eng
Format: mobi
Published: 2020-04-14T00:00:00+00:00

REVOLUTION 8: CUTTING THE CABLE

We've had 80 years of linear TV, and it's been amazing, and in its day the fax machine was amazing. The next 20 years will be this transformation from linear TV to Internet TV.

Reed Hastings – CEO of Netflix

In Natural History Museum in New York, if you make your way to the prehistoric section, you will notice something curious sandwiched between the Tyrannosaurus Rex and the Pterodactyl. It is an extinct creature previously known as Blockbuster. This is the video rental store that was unable to adjust to the changing temperatures in the industry of media consumption.

Curators of the museum have recently opened a space next to Blockbuster. To date, no specific names have been added but there is a generic sign "cable companies".

Here is the thinking of the curators. When it comes to media, consumers are looking for two things - great content that they consume on-demand. Netflix, Amazon Prime and Hulu and jumped on this like a vegan dinosaur onto a eucalyptus tree. Netflix started its life as a mail-order DVD company which met both requirements.

What happened was that the market quickly inserted the word "instantly" on-demand. Physical mail is everything but instant. Netflix adapted and then took it to the next level by producing exceptional content that was streamed online. Anyone who has spent a rainy weekend binge-watching Breaking Bad will be able to vouch for the quality of the content.

So what does this mean for the cable companies? In the U.S. in 2018, 33 million people cut the cable or the cord. Thirty-three million American men did not get vasectomies (although curtailing the ability for Republican Americans to procreate after the 2016 presidential election results may not be a bad idea). They cancelled their cable subscriptions after realizing they were living on Netflix, Hulu or Amazon Prime.

I am not saying Comcast is going to go belly up tomorrow. Cable companies need to reinvent themselves or find their way into the prehistoric exhibition at the Natural History Museum.

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