I saw a article on Yahoo today and it resonated with me, because my wife and I have recently gone through an exercise in reducing our cable bill.

We had a package that offered a large number of channels and internet at about 20Mb/s, and we payed almost $200/month for it. We took a look at the channels we regularly watch, and the shows we like, and decided that we can cut a considerable number of channels from our channel line up. We also watch almost no real time TV shows. Almost everything we watch comes from either the DVR, or from Netflix / Hulu / Amazon.

While we have not cut cable completely, we did reduce our channel package, and increase our internet speed from the 20Mb/s to 60Mb/s. After looking at our usage and viewing habits, the channels we were watching can be obtained from a Roku or Apple TV box (we have both) with Netflix, HBO Go and Hulu Plus subscriptions. We managed to save ourselves about $100/month.

I think this highlights the changes in viewing habits, driven by lifestyle changes and technology advances. We view the cable company now as just our internet provider, who also provides some tv shows. A few years ago that statement would have been reversed.

Going forward, I believe the cable companies will become more and more like internet providers, offering tiered data plans, with add on packages for tv channel bundles that are optional. The big fight in terms of content is going to be from sources like Netflix and Hulu, and these will be where the ad revenue is to be generated, not from the cable companies any more.

It will be interesting to watch this scenario unfold over the next few years to see exactly where it all ends up.