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Media companies also want to gather and crunch all the data about viewing habits they can to sell to advertisers. The companies receive less high quality data when people watch network programming through an app from Dish Network or DirecTV instead of using their own apps.

"Both sides are paranoid. The operators think that if the programmers can create a one-to-one relationship with the consumer, some day they peel off and become their own HBO," said an executive at a media company involved in content negotiations who was not authorized to talk to the media.

Ad sales on the platforms are still small and hard to estimate, but revenue is expected to grow as more viewing moves to mobile devices

The vast majority of Americans – 95 percent – still watch television using traditional cable or satellite options, according to Nielsen. But the number of households that choose to opt out of cable or satellite TV is on the rise, from 2 million in 2007 to 5 million in 2013, Nielsen’s data show.

“This scares the bejesus out of the cable and satellite people,” said Jim Barry, a spokesman for the Consumer Electronics Association in Arlington, Va. “I think it’s going to change the business model.”

A main driver behind the high cost of cable and satellite in recent years is the expensive license fees networks pay sports leagues to broadcast their games. The cost gets passed on to consumers to pay for the “bundles” of channels they get with their cable satellite subscriptions, whether they plan to watch sports or not.

Investors should keep tabs on Verizon's negotiations with Intel to see if Verizon acquires the OnCue Internet-based TV services. If the deal goes through, investors should pay attention to how Verizon plans to use the OnCue services. Bundling OnCue services with Redbox Instant would incentivize subscribers to use Redbox services as a complete TV and movie entertainment package. Outerwall would greatly benefit from such a bundle because more Redbox users translates into expanding revenue. Also, additional offerings under the Redbox name will improve the company brand.

OnCue would be a good addition to Verizon because the company is already in the content business with Redbox Instant and FiOS TV. The question is whether Verizon can negotiate a good deal with Intel. The OnCue service would work well bundled with FiOS and Redbox Instant, or left as a stand-alone product.

The features of this service resemble those of a DVR, but the main difference is every show is recorded and available at any time. The OnCue hardware and services are currently being beta-tested by Intel employees and select users.

A good chunk of the tournament’s 67 games will only be available to people who have access to Turner-owned cable channels TNT, TBS and TruTV. And for the first time ever, that includes the two semifinal games on Saturday, April 5: If you don’t have pay TV, or a friend who does, and you don’t want to watch the Final Four games at a bar, you’re going to be out of luck.

Big-time sports have been migrating from free broadcast channels to pay channels for some time.

Netflix is banking on getting on cable set-top boxes to hit aggressive growth targets in the next few years — but not every U.S. operator is eager to play ball with a company they view as a rival.

John Malone, whose Liberty Media owns a stake in Charter, has dismissed the notion that MSOs should pair up Netflix. At the company’s annual investor day this month, he said cable operators should team up to create a Netflix-like subscription VOD service, criticizing the industry for being slow to respond to over-the-top competitors.

Longer term, Netflix projects that it can be two or three times larger than HBO’s current linear base — with 60 million to 90 million subs in the U.S. Hitting those numbers would likely require pay TV deals, to reach consumers who don’t want a separate box for streaming Internet video.

With the rapid adoption of the tablet as a content device, interest in streaming content has nearly doubled in the past year (from 17% in 2012 to 32% in 2013). Consumers have also expressed more interest in consuming programming on different devices and from different sources. (Indeed, younger Millennials spent more time watching content on non-television devices, even when that content was originally created for television, Belson says.)

“This is the first year that consumers have started to decouple the notion that content from a particular source [must be viewed on] a different device,”

Only 6% of consumers who had pay-TV services said they were considering giving up the services in the next year, according to the survey.