Mark my words. There will be a time when the telecoms and IT industries will care about the upfronts. It’s just going to take a while, and by the time it happens, the upfronts may not be as important as they are today.

Diane Mermigas has an excellent blog post about cable’s latest set of wins over broadcast. Despite these wins, her rationale is that the internet is a wild card, and things may look very different next year. I found the comments most interesting with the Cabletelevision Advertising Bureau (CAB) pointing out that “web video” is a hard-to-measure unknown…and the research firm clarifying the statistics.

But one thing keeps popping out at me: the phrase ad-supported cable which stands for the cable networks that sell advertising: ESPN, Bravo, A&E, TNT, TBS, Discovery, USA and so on and so forth. Ad-supported is distinct from premium, subscription-only cable networks like HBO. No big deal. Just an issue of semantics. Right?

Well, not actually. Because ad-supported cable still relies heavily on subscription revenues paid to the cable networks by the cable operator. Sometimes to the tune of 50% of total revenues.

By comparison, broadcast networks (ABC, NBC, CBS, Fox) rely much more heavily on advertising revenues. And cable industry organizations such as CAB are quick to point out the differences, explaining why cable television is so much better than broadcast.

But is ad-supported cable a free rider on a system largely built around advertising? After all, the precedent for 17 minutes of advertising per hour is something established by the broadcast networks. And viewers started out with broadcast…before cable was available. And once cable networks appeared, it was a given that (1) there would be advertising, and (2) users would have to pay more to get rid of the advertising…as with HBO, Cinemax, Showtime, Starz, etc.

After all, we were paying for more channels and a better signal. That’s what the service charge was for, right?

What happens when cable networks continue to be as successful as they have been? What if there were no broadcast networks? Would people look at their hundred dollar cable bills and ask the obvious question? Why am I paying for programming with advertising in it?

This is the open gardens versus walled gardens argument in another medium. The reality is that ad-supported cable is also subscriber-supported cable, but the industry doesn’t want to call that out. More important is whether business models that combine advertising and subscription fees can exist in worlds without open access services. Can the carrier mobile portal exist without there being an open internet? Can subscriber- + advertising-supported cable networks exist without there being open access broadcast television?

I’d say not. These businesses are free riders on the idea of open access services paid for by advertising. Cable television is just another form of the walled garden, and we’re already seeing the holes in the walls. Viewers are finding new ways to get programming and skip advertising. One of these days, you’ll hear the CAB talking about how internet viewership is actually helping their ratings. Wait, they already are.

The CAB has spent close to three decades talking about how cable is better than broadcast. Now that things are finally swinging their way, it’s clear that they can’t be too successful. Because if that happens, viewers are eventually going to start asking for lower subscription fees…or less advertising. In the telecoms industry, it’s called declining ARPU. So be careful what you wish for…