A terrific read in Light Cable Reading of the rise of Virtual MSOs. If the definition of an MSO is one that aggregates and bundles licensed content and then resells to subscribers, then we may not find one that will offer the same abundance of content as cable. Most of the best networks license their content based on volume and the costs to get these providers to deliver the same content at rates being offered for MSOs the size of Time Warner or Comcast is quite unlikely. The rate per sub for reaching 10 million customers is far less than the rate per sub to a smaller MSO with say 1 million customers.
But the world of the virtual MSO aggregating content via the broadband platform may not need to duplicate cables' lineup. Rather, it simply needs to enable the connection. Xbox, Boxee, Tivo, and other OTT devices already use broadband to watch content from YouTube, Netflix, Hulu, and other streams. In essence, a "virtual MSO". TV manufacturers are doing the same to create a "connected" TV. And Boxee is enabling their box to bring digital broadcast signals to the TV set. Between these channels and streaming web programming, an alternative aggregator has been enabled already.
Still, if it is about duplicating the cable programming line-up, the costs must be absorbed until the "virtual MSO" gets up to a significant number of active subscribers. Perhaps the NCTC (National Cable TV Cooperative) would be willing to take one of these new entrants into their group. "There's seemingly no shortage of candidates that have the scratch, and perhaps the will, to give it a go. Not Microsoft (see above), but maybe Apple Inc. (Nasdaq: AAPL), Google (Nasdaq: GOOG) or Amazon." The one concern for a customer switching to a "Virtual MSO", they still have to pay their current broadband/cable provider for their broadband service. And no doubt that broadband cost would rise should they drop their cable service.
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