Why cable operators are app-happy

Cable TV The Wall Street Journal has a nicely comprehensive overview this morning of efforts by various cable and satellite TV providers to create mobile apps that will allow existing subscribers to stream some of their pay-TV content to the iPad and eventually, one assumes, to Android and other mobile devices. It’s a smart move by the operators, but a fraught one as well.

Smart because apps platforms like the iPad App Store and Android could soon offer content owners the means to reach viewers directly, on in-home as well as mobile connected devices. As I noted yesterday, Apple, for one, is clearly bent on establishing the App Store as a content delivery platform distinct from existing modes of delivery, like cable, satellite and web browser. Given Apple’s a priori e-commerce relationship with App Store users, that poses a long-term threat to the MSOs’ subscription relationships with their customers — operators’ main reason for being.

By moving quickly into apps themselves, before more premium content becomes available directly through the App Store, the MSOs have a better chance to avoid conceding their subscription relationships to Apple or other platform providers (to say nothing of other aggregators like Hulu and Netflix) .

The effort is fraught, however, on at least two levels. It ultimately fuels the growth of app-based content distribution, which could actually increase the danger the strategy is meant to counter. It also sets up an inevitable clash between the MSOs and the networks over streaming rights. As the Journal story notes (oddly buried toward the bottom of the article) cable operators seem to be proceeding from the assumption they already have the necessary rights to stream their subscription content to mobile devices. It’s a fair bet the networks are going to want to put a price on that assumption when the current carriage deals come up for renewal.

Further reading:

Why Cable Operators Need an Apps Strategy ($$)

Cable Companies Look to Crush Netflix and Hulu With iPad Apps

As Streaming Prices Drop, A Bet on High-Def