Two less cables: Services like Hulu Plus and Netflix streaming have a huge problem getting content, and I continue to think that this is in no small part because they vastly underprice their services—which they do because consumers continue to decide how much they’re willing to pay for content based not on the content itself but on the delivery mechanism. If you watch a dozen shows and pay $120 a month for HD cable, you’re paying around $2.50 per episode. An iTunes season pass for a 24-episode show in HD is probably going to be about $45, or $1.88 an episode. Yet consumer behavior suggests we think iTunes is the service that’s priced unreasonably.*
I wrote a few months ago that I doubted you could do a streaming service that was really capable of supplanting cable or satellite unless it was at least $30 a month, and that’s probably including ads. I don’t think Netflix or Hulu could ask that kind of price and have a snowball’s chance in hell of succeeding. I doubt even Amazon could.
[Lisa and I were discussing the math of cable just last night. Generally it doesn’t provide the value you think it does. It’s worth looking at what you use cable for… you might be able to drop it.]
Source: Coyote Tracks