CBS, HBO move into Internet TV: Cable cutters, rejoice

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CBS show NCIS will be available on All Access.
CBS show NCIS will be available on All Access.

Within a day of each other, CBS and HBO announce new services that have the potential to disrupt traditional cable TV

It has been a huge, possibly historic, week for the television industry. Yesterday, HBO announced that starting next year it will be selling a web-only subscription service that doesn’t require a subscription to a cable provider.

Not to be outdone, today CBS announced a digital subscription service for video-on-demand (VOD) and live streaming content (excluding NFL games) called CBS All Access.

It’s not hyperbolic to say both of these developments could lead to revolutionary changes in television (if we can still call it that). The developments mean consumers will no longer have to pay top dollar for cable packages chock-full of networks they couldn’t care less about to get the programming they want.

As long as a home has decent broadband capabilities, it can enjoy far more specific programming at a fraction of the cost.

"This is a seismic event in the future of television," Jeff Cole, director of the Center for the Digital Future at the University of Southern California’s Annenberg School told the WSJ. "Cable is shrinking and broadband is expanding."

All Access will cost $5.99 a month and feature thousands of current and classic CBS programs. It looks like a similar model to Hulu and will provide new opportunities for advertisers. CNET.com reports the classic shows will be ad-free, but more current content will have commercials, while streamed content will have advertising programmed into it.

HBO has not released much information about pricing or content, though its strategy is clear. It wants to target broadband-only homes, which means far fewer people will have to borrow an HBO GO login to watch Game of Thrones. That sounds like win-win for the network and consumers. HBO won’t have to worry about giving away as much free content, and subscribers won’t have to break the bank to watch their favorite shows.

If two established networks like HBO and CBS can successfully transition to live streaming content and VOD formats, it could take the paradigm shift triggered by the launch of subscription services like Hulu and Netflix a step closer to its logical conclusion.

As affordable streaming and VOD content becomes more available, consumers increasingly will have the power to assemble a menu of à la carte networks without having to pay for anything they don’t want.

This will create more specific viewing patterns than ever before, which should only be good news for advertisers looking to reach targeted audiences.

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