Big success stories such as Time Warner's (TWX) HBO and Liberty Media's (LMCA) Starz and Encore have cable and satellite companies by the short hairs. For all intents and purposes, they run in a different world.
Satellite and cable companies maintain viable businesses because, somewhat ironically, they get fleeced by the content owners. Cable and satellite turns around and charges premium rates to subscribers because, contrary to popular meme, cord-cutting -- at least at this point -- is not viable for most viewers, who want live sports programming, first-run television shows and movies and other exclusive content.
Even if content goes digital -- think HBO GO and the myriad TV Everywhere ventures -- you need a traditional subscription (or subscriptions) to access it.
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