IAC chairman Barry Diller thinks the cable and satellite TV model is headed for a big shakeup in the next five to 10 years.
Speaking at Business Insider's IGNITION conference Wednesday, Diller said negotiations between cable/satellite companies and content providers will eventually reach the point where it doesn't make economic sense for customers to buy bundled viewing packages.
"I think the future of television is more fragmentation," Diller said. "The bundle has no more elasticity in it."
What the heck does that mean?
Eventually it'll be too expensive for cable/satellite companies to deal with the content providers. That'll push those content providers to offer shows "over the top" through streaming services instead of what Diller called "closed networks" like cable.
"At a certain point, I think there is no more pricing power in cable or satellite distribution," Diller said. "That is going to have a profound five or 10 year effect."
We've already seen some hints of this happening. CBS announced it'll have a streaming subscription next year that'll let you watch shows for a monthly fee. HBO announced a standalone version of HBO GO is coming next year too, but didn't provide details on pricing and content offerings.
Those examples, coupled with services like Netflix and Hulu, are what Diller called "chinks" in the armor of the traditional method of watching TV.
Diller has been involved in trying to change TV distribution before. Through IAC, he backed a startup called Aereo, which let you stream live broadcast networks like NBC, ABC, and CBS over the internet. But the networks sued Aereo all the way to the Supreme Court and Aereo lost. Last month, Aereo filed for bankruptcy as it tries to sell off its assets.
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