Apple Is Reinventing TV. The Question Is: Why Didnt The Cable Companies?

Author

Bryce Hoffman, Contributor

March 19, 2015

In today’s rapidly changing marketplace, every company has a choice. Gen. George S. Patton famously put it this way: “Lead me, follow me, or get out of my way.”

Once again, Apple Inc. has decided to lead, this time in reinventing the pay-television business. And once again, most of the established players — Comcast Corp., DirecTV LLC, Charter Communications Inc. and their ilk — seem to be opting for one of the other two alternatives.

It has almost become cliche, so why does it keep happening? Why do big corporations staffed by talented people and led by skilled executives let disruptive innovators muscle into their space and push them out — or at least make it uncomfortably crowded?

In many cases, the answer is this: They believe that what has worked for them in the past will continue to work for them in the future.

That has certainly been the case with the cable companies. For decades, they have enjoyed near monopolies and been able to rely on simple demographics to grow their businesses. As long as their customers kept having children, their bottom line was bound to increase.

As the Wall Street Journal wrote today: “For years, TV channel owners and their pay-TV distributors — cable and satellite providers — were able to count on two reliable trends: that pay-TV subscriptions in America would grow each year, and that consumers would submit to paying ever-higher cable bills.”

But a business model based on human biology is hardly the stuff Harvard Business School case studies are made of. The proliferation of high-speed Internet service began to undermine both of those trends. Suddenly, consumers had new ways of watching their favorite movies and TV shows. A pioneering few began “cutting the cord.”

Pay television subscriptions started falling in 2013. That should have been the cue for the big cable and satellite companies to start reinventing themselves and their industry. Instead, most opted for the predictable path of consolidation and left the thinking different to outsider such as Apple.

Now, they’ll pay the price.

As one cable company executive told the Journal: “The ice cube is melting.”

It didn’t have to gone down this way. Instead of watching Apple grab the headlines for reinventing their industry, the cable and satellite companies could have done it themselves and reaped the rewards.

At least one of them did.

Dish Network Corp. began developing its own Internet TV service, Sling Television, which will likely be one of Apple TV’s most serious competitors.

There is a cautionary tale here for every company: If you don’t disrupt your own business, the marketplace will be more than happy to do it for you.

This article was written by Bryce Hoffman from Forbes and was legally licensed through the NewsCred publisher network.

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