When you pay your cable bill, you effectively pay for two things: content and delivery.
For instance, I currently pay Comcast, as many other Americans do; it’s the largest cable company in the United States. Comcast has to pay for the content it delivers to me, with the exception of its own NBC products. The company passes these costs, along with the cost of delivery, on to me.
Cable companies have traditionally done very well because of their complete control of the delivery aspect of the transaction. Even if they have to pay for content, cable companies long relied on the fact that content creators like HBO had to go through them in order to reach viewers. Until recently, there was no other choice. Networks have, however, historically fought hard to increase their licensing fees, a struggle which has mainly resulted in ever-rising cable subscription costs.
Streaming video has begun push the boundaries of this arrangement in recent years. Now Google is poised to disrupt the cable model outright.
Taking a cue from streaming services such as Netflix and Hulu, Google has announced plans to offer a subscriber version of YouTube, which is currently supported entirely by advertising. The new paid model would not replace ads, but would allow users to pay a fee to avoid them. Google has said it will share subscription revenue with video creators.