This model sounds a lot like the old magazine business model. Just like AMC wants you to tune in at 9pm, Newsweek wants you to turn to the headline story on page 36. Both ultimately want to engage you as an audience to sell the adjacent ad-space. We know how poorly that business model has worked out for magazines in the digital age - I don't know if Cable TV can use their monopolies to keep out competing business models for much longer. History may repeat itself. At least, I hope so.
And we are heading back into a world full of subscriptions. Subscribe to Netflix. Subscribe to Amazon Prime. Subscribe to Hulu, to Spotify, to HBOGO, to the CBS app to the WWE Network, etc,..
The newspapers and magazines got hammered for a number of reasons. First off, they are in the information game and no one has a monopoly on reporting information. If I want to find out who won an NFL football game or what the weather is going to be like there are dozens of different places to go for that information. By contrast if I want to see a new episode of The Big Bang Theory I have no choice but to wait until CBS releases a new episode of BBT because they are the only ones making BBT.
Secondly, not only can online sources for news get breaking news to the public faster than a daily newspaper or a weekly news magazine, they can do it with relatively little overhead because putting text on a web page is pretty cheap to do (especially if you are just copy and pasting an article from the AP newswire). By contrast, TV shows can be some of the most expensive forms of entertainment to create (ex. average network TV, prime time drama costs $3 million per episode and have about 23 episodes per season). The cost of creating and distributing TV shows and movies severely limits the competition.
Finally, people also became used to getting information free on the internet. This put newspapers and mags in a bind because if they put a paywall up then people might just go else where, but if they didn't put a paywall up then their web sites were cannibalizing their physical subscriptions. Plus, online ads don't pay crap and the cash cow sections of local papers (the want ads) got killed by online competition like Craigslist, Monster.com and Match.com. Newspapers and mags (like music) were some of the first to get clobbered by the Internet and really had no idea how to react to it. TV and movies, on the other hand, have much more information to go on.
The decline of actual journalism in the U.S. due to newspapers and magazines going under is frightening but that's a whole other topic.
Getting back to the TV side of things... Besides content creators having a 'monopoly' over their original content and the high cost of content creation, cable TV also has the advantage of being the largest broadband providers in the U.S. Sure, people can cut the CATV cord but how many are cutting their broadband cord? Comcast is working out the best way to monetize the move into a primarily IPTV/VOD world and so are Time Warner (assuming the merger falls through), ATT, Verizon, DirecTV, and Dish Network. Whether you pay Comcast for cable so you can get AMC and watch The Walking Dead or you pay Comcast for broadband so you can pay iTunes or Amazon so you can watch The Walking Dead you still end up paying Comcast.
Lack of ISP competition should be seen as a pretty critical issue in the U.S. because we are quickly getting to a point where that single point of entry gives us all of our news and entertainment when we used to get our news and entertainment from a variety of separately owned and controlled TV stations, radio stations, movie studios, newspapers, books and magazines. The ISP is becoming the ultimate gatekeeper.
