Between newcompetitors, cord-cutting, and government regulation the annual Internet andTelevision expo comes at a time when the traditional TV business is facingunprecedented challenges.
By the year 2018, eMarketer predicts that one in fiveAmericans won't subscribe to a cable TV package. That doesn't mean that they won't be watching TV, they will just have more ways of accessing what they want to see.
"Iwould call this the calm before the storm, on the brink of a whole new set ofservices that are more compelling than the ones we have now," said cableanalyst Craig Moffett. "You ain't seen nothing yet in the sense thatcord-cutting could be poised to accelerate in the coming year."
More companies than ever are selling access to television, access that is comingin different shapes, sizes and price tags.
Of course there are still the cable andsatellite TV companies, and the telcos, such as Verizon FiOs. Now, after yearsof these players offering traditional bundles, they're increasingly taking newapproaches to reach younger demographics with smaller price tags. Most notably,there's Verizon's "Custom TV" packages and Dish's Sling TV.
Plusnow there are a slew of tech and Internet companies jumping in to the game:Sony with its PlayStation "Vue," and Amazon, in addition to its on-demand Prime offering, is partnering with Comcast to sell its TV service.
And then there'sHulu, which announced that it's working on a new live TV service launching nextyear. The company is in advanced talks with two of its owners, Fox and Disney.And because of the restrictions placed upon its third owner, Comcast, when itacquired NBCUniversal, the cable giant doesn't have a vote to say no. (Comcast declined to comment on the negotiations.)
Moffett said Hulu poses a bigger threat to pay TV providers "because Hulu is backed by the content companies themselves, and therefore has that one key element, which is they've got the programming." Moffett added that Hulu "walks that line between making it attractive and compelling for consumers, but not so attractive and compelling that it is threatening to their existing distributors."
And it's not just Hulu: Google's YouTube, plus Amazon and Apple are all reportedly working on their own bundles of live TV channels. It's unclear how far along their talks are with content providers, but it's clear they see upside in this business, not just from advertising and subscription revenue, but also from all the data about what consumers are watching.
Google in particular may get access to some content if the government mandates the unlocking of the set top box — creating a third party market for those boxes. And the biggest winner from this change could be Google, which could re-package and re-sell content.
"The way that they are doing it is to unbundle content streams with companies like Google who can then repackage that content stream in whatever way they choose," said Moffett. "Companies like DirecTV and Comcast, and even the entertainment industry would argue that it violates all kinds of programming agreements, all kinds of copyright issues."
To stay ahead of the never-ending stream of new competition and fast-changing consumer tastes, cable companies are offering more options. Take Comcast, CNBC's parent company, which unveiled its new X1 user interface for the Olympics at the Expo, designed to make searching and browsing TV as intuitive as the web.
"What our company is trying to do is make sure we're really available to customers wherever they go. Some customers clearly will not buy a bundle. Some will want a skinny bundle, and some will take it a different way," said CEO Brian Roberts in an interview.
And while Comcast surprised Wall Street by growing its video subscribers in the first quarter, it and the other cable networks have also hedged their bets by investing in the other way people are accessing content: High-speed broadband.
"We had the best broadband first quarter in four years because we sped up our Internet fourteen times in twelve years. These are the investments we are making in technology as we've transitioned from a cable company to a media and technology company," said Roberts. "You can't predict the future but you can try to be really relevant and unique in that future. "
Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.