Hulu, Netflix Only Make Cable TV Stronger

NEW YORK ( TheStreet) -- A moment of clarity: I never said the present cable model is fair; I'm just saying it's not going anywhere anytime soon. That's the sentiment I thought I expressed earlier this week in HBO Hates Netflix (And You Should Too). But, based on the cards and letters I received, some cats didn't take it that way.

I forget who it was (forgive me, I read hundreds of articles a day and forget to Pocket all of the worthwhile ones), but somebody wrote that if cable and satellite let you pick and choose channels instead of buying a package of 200, most of which you never watch, you would end up paying as much, if not more than you do now.

One hundred percent spot on. In this menage a trois you persuaded her into having, you do not want to role play as the cable company. Sure, they fleece the consumer, but that's only because the content owners fleece them. Don't ask to bear their cost.

But, let's just say mass intuition has it right for once and blowing up the cable/satellite model would be good for humanity.

Deja vu ... that's not going to happen.

The experience of every single company that licenses digital content proves this.

Hulu is fixing to die. And it's not simply because Jason Kilar, the company's CEO, resigned. That's just a symptom of a larger disease called Hulu Has No Future.

For a while, I walked around with this pipe dream that the old guard -- News Corp ( NWSA), Time Warner ( TWX), Disney ( DIS) and others -- would make the forward-looking move and turn Hulu into a kick-butt one-stop-shop for any and all content.

If it wasn't obvious before, it is now. Big media could make it happen tomorrow, but they absolutely refuse to because doing so means the end of the television model that makes them not just rich, but carefree.

That model works like this: I am a programmer. I own a bunch of networks. People love one or two of them. Or maybe they just love one or two shows on one of them.

Or, better yet, I have the rights -- for the next decade -- to key professional sports content. I force the cable or satellite company to take the networks nobody watches -- and pay for them -- just so they have access to the stuff people actually like. The consumer pays for the package, but probably doesn't come close to using it all.

Why end this gravy train if you don't have to? As long as content stays concentrated in a relatively small number of entrenched hands, the old guard media conglomerates, particularly the ones with premium sports programming, have no incentive to change.

It's a sweet deal. Not only do they profit from this closed model, but they're able to take less attractive content or reruns of shows that need a push and sell them for millions to anybody from Netflix ( NFLX), Amazon.com ( AMZN) and Apple ( AAPL). But they never give them enough to do what they really want to do or achieve anything close to total domination in the living room. If you pay attention to the libraries and experiences of Netflix, Amazon and Apple, this much is obvious.

That's why the deal Netflix cut with Disney made me curious. I have to think that's an anomaly or Disney just doesn't think Netflix will survive long enough to see first-run films in 2016.

So, that's it. It might not be fair, but it's simple. And, at the end of the day, consumers are helpless. That includes me. I give DIRECTV ( DTV) $64.98 a month on a two-year contract, plus $179 a year for NHL Centre Ice.

When I was a wee child back in the 1980s (bam!), I remember my mother screaming at the rotten cable company on the phone. She still complains when they raise prices or make her "lease" a new set-top box. Same story for the past 35-40 years. Hasn't changed a bit.

Hulu was our best chance to change things. It was the bleeding heart liberal of the 1960s Robert F. Kennedy! If you're counting on Netflix to incite hope and change, you better not hold your breath or cut your cord. An extinct Hulu and a shaky Netflix only makes cable that much stronger.

--Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

If you liked this article you might like

A Top Investment Bank Just Made a Move to Protect Against Another S&P 500 Crash

A Top Investment Bank Just Made a Move to Protect Against Another S&P 500 Crash

Watch Jolt: Snapchat's Stock Gets Shredded While GE's CFO Sorta Shines

Watch Jolt: Snapchat's Stock Gets Shredded While GE's CFO Sorta Shines

Roku's Strategy Still Looks Solid In Spite of Its Disappointing Outlook

Roku's Strategy Still Looks Solid In Spite of Its Disappointing Outlook

Jim Cramer: You Have to Decide If You Want to Profit From This Moment

Jim Cramer: You Have to Decide If You Want to Profit From This Moment

Why Facebook Struggles to Keep Pace With FANG Peers

Why Facebook Struggles to Keep Pace With FANG Peers