- take it that does it for this broadcast. i'm david shuster, thank you for joining us. next ray suarez with "inside story". and we leaf you with the empire state building lit up in honour of world's ocean day. thanks for watching. [ ♪♪ ] an enormous cable merger falls through, a content provider offers products to people with no cable subscription another company is offering viewers the option of creating their own channel line-up and millions of households are cutting the cord dropping cable. once must-see tv - is cable television now unplugged from

the future. it's tonight's "inside story". remember when there was no monthly tv bill. commercials paid for the programs. you bought a tv, that was it you were in. no subscription, no menu of choices, no bundling no sky rocketing bills. over time americans were accustomed to paying tv and watching for commercials. cable soared and cable-only channels were household names and innovators in the art of making television. bills were rising now interactivity is where it's at. scrolling through a netflix menu, using a handset to pick through choices on apple tv. more are watching without table,

millions dropped cable service and find there's plenty to watch once they are unplugged. >> i'm not getting illegal cable. >> gone are the days that science felled could -- seinfeld could joke about bribes and hot boxes to avoid paying for cable tv. millions cut the cord. why pay for thousands of channels they never watch. the solution is out of tv's golden age. >> movie reel: move around the room. i'll tell you if it comes in clear. >> reporter: the rabbit years of yesteryear evolved into high definition indoor antepas. with a $20 purchase you can get network shows oscars and super bowl free. tack on one of more than a dozen online tv services.

>> based on a subscription we can stream the latest shows, and we can see everything we want there, at a fraction of the price. i think we are paying $8 a month for that. an rocubox taps your tv into cyber space giving you access to youtube sites and streaming content on the web. hulu is a go-to for shows on standard networks like comedy central and fx. itunes and amazon open the door to a la carte television allowing users to purchase the show they want typically within a day of when they air. >> if you can't live without game of thrones. services like h.b.o. and netflix are helping subscribers fill the gaps. >> it's clear that audiences are no longer centered in showing up

at 8 o'clock to watch television. this that is true more content will be offered up to services wherever you want it, whatever device you want. >> another earthquake is the emergens of amazon and netflix as producers of programme. two of america's popular shows, orange is the new black and house of cards are exclusive to netflix. the one area in way streaming services can't deliver yet is live sports. regional networks typically hold exclusive broadcast right and are only available on cable tore satellite. technology like the slipping box is allowing users to share that by streaming it to a pass ward protected web address, adding up to a loss of 5 million cable tv subscribers over the past five years. joining me from phoenix is

bill wyman, a cultural commentator and formers arts comment dater. and a lawyer fo entertain. of pricewaterhousecoopers. >> 5 million subscribers cut the cord of their 90 million account that is still active. it's something that tells a scary story about the future. >> thank you for having me. at this stage it's a marginal loss. we are seeing pay tv across the board. it holds up well. what it is driving at is customer choice. the question is where that goes in the future. if you look 10 years out, 5-10 years out. and where the different consumer choice is to go. how it is under the water.

how much disruption will be caused by those, and where consumers will drive the viewing habits. >> looking out 5-10 years, i have two 20-something kids, one is a cable subscriber one is not. 50% penetration is a far cry from where the industry has been. >> very true. in that world where most forecast video is delivered through it and with the generation looking to mobile devices, you see a degree of disruption. i wouldn't counselled the tv providers that exist today. the traditional providers out of the equation. they are looking at ways to create more of a tv anywhere experience and there's a draw in what we consider to be an overall bundle. part of the equation will be how fast can we build the infrastructure for some of the services that the over the top

providers will have to rely on. >> bill wyman, i guess one of the questions that will have to be aped is whether we'll -- answered is whether we'll have to go to the handful of companies to get these things in the furore whether it is disruptive in a way. force more options. >> well the answer is yes or no. youtube is a repository of videos and movies. it's lagged behind when it comes to creating must-see content. the trouble about the services is you have to have an internet provider. and one way or the other, they are at a company called comcast. providing cable and internet service. if they lose the customers, they'll get you. because you have to get

broadband through. that's a human. there's not enough competition on the local level. the prices will be jacked up to compensate for the loss of cable. >> as you say, millions are getting their cable television and internet from the same company. those cable television providers are working hard to try to keep the customers when they are already selling them other goods or a different wire. why are they working so hard to save the cable television business model bill? >> well it's an extraordinary remunerative one, and there's not enough competition, a scandal about the time cast warner merger is they were the two big counties there were agreements not to compete. we'll see something that happened the same with the record companies, where it's

hard to change your business model to deal with the future particularly when that future includes smaller revenues. i think we'll actually see them keeping their head in the sand and jacking up the rates for the subscribers, rather than trying to get ahead of this with the proviso that they are doing fine, they'll make more money from broadband. you are paying the company for entertainment. along with people that say yourself -- enough i'm out. there'll be households that never sign on in the first place. are the giants confident of capturing them one way or the other. >> we refer to that. we start the latest version outlook. and we refer a lot of folks - it's a millennial generation

viewing video content differently, as household formation developments there are advantages to what we consider a tv bundle. one is not a cost. it's cheeper to look at the over the top providers, there's value that they provide. sports programming is a great draw. it's hard to replicate programming as an example in a traditional environment. so they have a newer way of dealing with that in terms of providing value across the bundle. there's no question it will disrupt or that they'll have o look at ways to upgrade across the eco system to retain and draw that generation. we'll continue the conversation with bill wyman and greg boyer. when we come back in a marketplace where customers will pick and choose channels and

cable altogether can the business models that led "madman" "the sop rarno's", and "game of thrones" survive. unplugged is tonight's "inside story".

you're watching "inside story" roim ray suarez. the -- i'm ray suarez. the tumult between the cable suppliers, channels customers - with millions of households saying "enough" and going unplugged, we are looking at the future of cable tv on the programme. we are talking with bill wyman and greg. with the business pressures, will it force change in the range of offerings. i was disiping through the channels. it occurred to me there are

dozens of channels. many of them from the initials i didn't know what they did. will there be a consolidation in that part of it. >> actually i hope not. this is a great time to be a consumer. there's so much great tv that you can't watch it all. that was the case 2-3 years ago. they have to swing through the fences, do something original and powerful to get attention, for u the consumer it's great. the fact that we don't understand some of those channels it's freight. some don't understand the channels we watch. that's a triumph of what happened. the bad thing is as a user experience. television is miserable. you have control on apple tv. cable control. blue ray controller nothing works the same way, you have to

subscribe to different services and you can't get amazon streaming. it's misser able for consumers. i hope it will consolidate and make it a lot more easier. >> you feel the business model is there for the continuation of what some are calling the now golden age of television. >> i hope so. we should make clear, it's a touchy business model. with the advent of d.v.r.s, a lot of people are not watching commercials. i don't know anyone who watches commercials any more on some of these great shows. that is something - even if nothing showed the cable industry, it would have to come into contact. a lot of the other things, h.b.o. aside, they are the gold standard, they make billions in profits. no one else makes that kind of money, and you see a lot of people - when you read the

interviews some of the creators say they are not making much money creating for netflix. time will tell over time how that model with work. on the other hand it may be a journey man type thing, but maybe you have a lot of people making $50 a week happy to have it. >> let's talk about the power relationships. who needs who in the new world of television. is it the cable providers pressuring the content suppliers, the other way around. who calls the shots? >> it's an interesting question. both distributors and programmers have - some edge in that battle. consent is king in that environment of consumer choice. large providers provide the pipes that feed a lot of distribution. i think there's opportunity for

both. simplify sayings and ease of the kust -- simplify sayings and the ease of customer experience. as complicated as the environment is, we'll need to see an ability to make it easier for customers to get what they want when they have it. some of the different products in the markets as well as some over the next couple of years, they aspire to do that. there's power on both ends of the spectrum. the weakest point is to be in the middle. if you are a programmer with not a lot of sway you'll be a bit - it will be negotiate what you need. if you are a distributor that is smaller and doesn't have scale, you'll be looked at as an acquisition target. we see a lot of that. >> i jotted down a couple of names, teuvo romeo google chrome cast rocuiii and there

are others. are they nibbling away at small bits of eye ball share. are we talking about something that cumulatively means a lot of people will watch a lot less black-wired television. >> kooumively we have an effect if you look at the next few years, it will go - the further they get out in terms of a timeline it will have a more disruptive effect. ultimately a lot of smaller players will get work out of the system or be merged with other players. consumers are looking for a number of matters. we are early days, and hope it

plays out in a couple of years. >> we are talking to bill wyman and greg boyer, a partner in media and entertainment for pricewaterhousecoopers. still ahead. hulu, netflix. apple and others - there's a now vocab u lairy. are we inching closer to the day there'll be enough power to get rid of cable. unplugged is tonight's "inside story".

welcome back to "inside story". i'm ray suarez. i have a great a sense of irony as the next guy. i'm aware if i'm talking to you you have a cable tv

subscription. when i come offset and take off the suit. i'm a member of a cable tv household, annoyed when my provider drops a channel i don't like, with nothing i can do, and using my apple tv because i can go a step further in the heavily customized world of tv watching to narrow cast a world not available on cable. joining us is andrew bojohn senior editor for "washin tonian" magazine. let me start with the battle of the giants. it goes on between the old line television company cable, internet providers and telephone companies. they say that when elephants fight the symbols, we'll sit and watch it happen. what's the state of play? >> the graph is trembling.

very much so. i don't think because the methods we get tv may be changing. the trend lines are going in a different direction. it doesn't mean that watching tv is going to go away. it doesn't mean paying for television is going to go away. why did it happen. tw giants decided to get married. we would be assured by various people and the companies themselves that the bills would not go up inextricably, why did that happen. it's funny how that worked out. it's to the benefit of people that put the most money into it. i think whenever you have this much money at stake, there's a lot of money at stake. it will always be how do we get paid. that's what we are seeing getting worked out now. with the technological

definition. and the wider set of choices about how and where you consume content. you would have thought that would have tempered price increases. people charming you say they are going other places, maybe we ought to cool it. it didn't happen. >> what is interesting is it may not end up being a good deal for you in the end. you pay a little bit for cable, and a little for each piece. that was the argument against unbundling in the first place, the idea was if you pay what the cable company to pay, you would be appalled by it. you might not be willing to pay for a lot of other things so the bundle for a lot of years was supposed to be something that helped consumers. but you are right. way too expensive. the logic was presented that no we are not going to let you

choose the channel line up. you take all the channels or none of them. you are in or out. verizon seems to have broken ranks, picking which channels they get. >> yes, they are offering a $55 bundle a bundle of channels and a choice of two smaller bundles. e.s.p.n. is suing, they are unhappy about this. why is that? is there so many es perform ns. >> -- e.s.p.n.s. >> it could be that. maybe you are not going to take e.s.p.n. 8. the feeling is that when people get the choice they may opt away and the cable companies will try to pay less to e.s.p.n. >> a lot of people don't realise if you pay a cable subscription the channels on your line-up are paid because you are sitting there watching them.

the cable providers pay a quarter or 35 sent per subscriber. >> or in es perform n, it's $22, and there's a lot of money going out the doors. it makes it remarkably recession proof and resistant to lower readings, it doesn't matter to a lot of news providers. for example. that their audience goes down. as cable companies pay them, whether they watch or not. >> it will be offered in the basic cable bundle. even if the ratings are down. you still will be paid by the providers. >> absolutely. it's a good business to be in. >> what is the sheikh out. are the new innovative products the hulos, the rokus, nib lipping away at enough dominance that we'll see the emergens of a

new model or is cable so big and dominant and fills up so much of the sky that everyone is in the shadow. >> it's a question of scale. it gets to the point where enough people can support. we don't know how much of orange is the new black is watched. there's a question about whether the buzzy shows are really bringing in the audience that could interest advertisers in placing products on the show. so it won't be traditional. we are a few years out on that. >> more may be talking about orange is the new black than watching it. >> absolutely or the right people. the loudest people might be talking about it. it may not be connecting the way that a big sitcom might. >> are we looking at a 3-5 year period of change or something much longer and much more

disruptive? >> i think we are looking at about 10 years before the playing field becomes really clear for everybody. the matters that pwc was talking about. that is what we are watching the closest. 75% of those people have cable. >> thank you so much for being with us. >> thank you for having me. >> i'll be back in a moment. talking about when a customer has hundreds of choices. if you want to follow on twitter, it's easily done. follow me and let us know what's on your find out what's on your mind on our facebook page.

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networks. dominant and profitable. limits on what any one company could open no computers. no internet. one of my jobs was replacing the ribbons in reporters' typewriters and wire service hashens clacking in the corner. now i may be watching the cracks appear in cable television, as computers open up an alternative world of choice. the cable providers scramble to protect their role but it can't last. too many people are anxious to use other ways to get content on to the 7 foot screen, and the 4 inch television that i have with me into my pocket. fasten your seat belt. thank you for joining us on

"inside story". . >> we don't yet have a complete strategy president obama admits that the u.s. has no comprehensive strategy to defeat i.s.i.l. in iraq hello, welcome to al jazeera, live from our headquarters in doha, also ahead: controversy on a u.n. report on countries that harm children after israel is removed from the list. schools are