I've often said that there is no single industry more impacted - one way or another - by the rise of online video than the cable TV industry, including both operators (e.g. Comcast, Time Warner Cable, etc.) and programmers (e.g. Disney, Viacom, etc.). While some see massive disruption ahead for cable, in the form of rampant cord-cutting, others see an industry that has covered all the angles and is well-positioned for ongoing success regardless of which way consumer and technology winds blow.

What is for sure is that cable is in the middle of the action in every possible way when it comes to online video - from providing broadband service to tens of millions of viewers that enables online video consumption, to deriving billions of dollars of multichannel subscription fees that many OTT companies are so eager to disrupt, to supplying the popular programs that have powered the rise of services like Netflix.

This week, as the industry gathers for its annual Cable Show, here is my perspective on the industry's top 3 opportunities and challenges due to the rise of online video:

Opportunities

Adding value through TV Everywhere
It's been almost 3 years since the term "TV Everywhere" was coined, and while there's only been modest success to date, TVE remains the industry's major trump card with online video. Depending on how you define TVE (which is just one of TVE's ongoing issues), the ability to extend viewing to connected and mobile devices is a winning proposition for consumers. The early success of HBO GO and WatchESPN attest to this. Far more needs to be done with TVE, and much quicker.

Robust technology platform and strong intellectual property
With their broadband pipes getting better all the time, operators are poised to win even if multichannel subscriptions erode. Programmers too look well-positioned; as long as they keep churning out popular programs, new aggregators (e.g. Netflix, Amazon, Google, etc.) will keep spending big bucks licensing them. In other words, regardless of what happens, big cable players will have a big role.

Staying cohesive
While the cable industry isn't monolithic, one of the most remarkable things that has happened since online video has exploded is that there haven't been any meaningful instances of any operator or programmer going rogue, and doing something that upsets the core multichannel subscription business model. Operators' and programmers' interests in preserving the multichannel model are very aligned as the model continues to more or less work for everyone. Unlike the music industry, which blinked when Steve Jobs came calling, nobody's hair is on fire in the cable industry. If the industry can stay cohesive (which is an if), it stands a much better chance of being a net beneficiary of online video, rather than being disrupted by it.

Challenges

Affordability, packaging and and sports
As a one-time industry executive, I've long understood the valuable role the multichannel bundle has had in launching specialty channels as well as the one-stop convenience it offers consumers. However, as others and I have more recently noted, the cost of cable, particularly for younger consumers and those economically-challenged, is prohibitive. I enjoyed reading that NCTA chairman Michael Powell does not want cable service to turn into a "premium luxury service," but the fact is, for many, it already has. The prime culprit is sports. The multi-billion dollar annual subsidy being paid by non-fans is simply unsustainable and it is creating a huge vulnerability for the industry which OTT competitors offering either free or inexpensive entertainment content, will try to capitalize on.

Well-funded competitors seeking to disrupt
When you have a relatively small group of companies controlling a $100 billion/year business, inevitably there will be plenty of others who will seek a piece of the action. Everywhere you look, that is happening now, and in multiple ways. Companies like Google/YouTube, Netflix, Amazon, Apple, Aereo, etc. are all gunning for the industry in one way or another, whether they'll admit it or not. Each is creating more consumer choice, and though early research suggest co-existence, inevitably cannibalization will accelerate. The impending explosion of original online programs is nearly certain to cause further audience fragmentation. More subscribers will question their expensive cable subscriptions or never bother to sign up in the first place. Beyond TVE, cable industry innovation in pricing and packaging is critical.

User experience
No question, the cable user experience has improved with VOD, DVR and recently with delivery to connected and mobile devices. Still, many subscribers complain about the clunky set-top box experience, the antiquated electronic program guides, the dozens of channels they don't watch and as always, the latest customer service imbroglio. Despite all of its strides, relentless UI innovations in online and mobile apps keep pushing users' expectations ever-higher. That's why innovations like Comcast's "X1" are so important. And the UI stakes will only get higher if and when Apple brings a TV-like device to market, assuming it has appealing content.

Add it all up and online video offers great potential, but also great challenges, for the cable industry. How it responds to the above will determine what the industry looks like 5 years from now.

(Note: I'll be at the Cable Show this week interviewing numerous key executives. Look for the video interviews coming soon.)