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AppConsumer.com

I’ve talked a lot about finding winners of the App Revolution. I’ve also talked a lot about how important it is to figure out how said App Revolution is going to impact your biggest investments, your career and so on. So let’s talk about one sector that is clearly on the wrong side of the technological tectonic shifts of a brave new app world that we’re all moving to whether we like it or not.

That doomed sector? The cable companies. Those old fashioned cable companies that went out and got themselves legalized local monopoly status by working the FCC system well enough and then selling themselves out to bigger legalized local monopolies as the Justice Department completely failed in its mission of protecting consumers and busting trusts until we ended up with giant, protected conglomerates run by goobers like Cablevision and the butt of any Knick fan joke, the Dolans.

See, the cable companies business models have long entailed borrowing huge amounts of money to endlessly try to upgrade their systems and then using the huge cash flows that their bundled subscription model creates. Take Cablevision (please!) and its $11 billion in debt and less than $1 billion in cash on its balance sheet.

Cablevision’s increased its annual reported cash flow from just under a billion in 2007 to more than $1.6 billion in 2009. I’m looking at cash flow from operations, by the way. But they’ve spent about $800 million of that cash flow on equipment and upgrading their network each year. Then they pay out about $100 million or so in dividends per year, I guess depending on how much money the Dolans blew on loser free agents for the Knicks and how much they want to waste on their latest Isiah Thomas-inspired acquisitions. But I digress. Point is they pay out $100MM in dividends per year. So they also have had to borrow a full one billion dollars over the last three years to keep afloat.

The upshot of this cash flow and balance sheet analysis is that of a company with little wiggle room, no? None of these cable companies have positive net cash balances and all are addicted to debt. That includes even the great Comcast, which at least is desperately expanding into the content ownership/creation side of the business model as the endlessly incompetent/corrupt Justice Department once again ignores the very essence of its mission of enforcing the law of the land which clearly would prohibit such vertical integration. Comcast’s got nearly $30 billion in debt and less than $8 billion in cash. Ouch.

So how does this whole App Revolution thing hit the cable companies? Well, do you think when we talk about mobile and wireless and how we’re all moving towards constant, instant, high broadband connectivity that we’re talking about cable companies? Didn’t think so. Do you think when we talk about watching Hollywood and other mainstream content, including news, on our app devices, whether tablet, handheld or, even nowadays, the TV itself that we’re talking about paying $100 or more a month for hundreds of channels broadcasting 24 hours of programming a day? Do you realize that even if you watched TV twelve hours a day, 7 days a week, that you’d still only be consuming 84 hours out of the 33,600 hours of programming that you’re paying for (200 channels*24 hours a day*7 days in a week)?

Do you think those economics make any sense? Or do you think that as the App Revolution technologies advance, and companies like Google and Apple and Microsoft, all of which have tens of billions of dollars of net cash on their balance sheets, create the platforms for us to “flip” channels/programs/networks/form-factors on our devices that we (or advertisers) pay for on a model that is 1-to-1 rather than 84-to-33,600 makes more sense?

Do you think the cable companies can continue to raise prices in the face of this onslaught of new competition? Do you think the cable companies can figure out how to profit even as they lose their ability to bundle content on cable subscription packages, much like the music labels lost their ability to bundle content on albums?

There’s a great old concept in telecom about how networks are likely to become ever “dumber”. The network is dumb. It’s just a transport for the smart stuff that rides on the network. The network of the App Revolution is a pure commodity — how fast does it transport the smart stuff? The cable companies will be around and will still deliver broadband network services to us consumers and businesses. But they won’t be able to bundle channels, raise prices and capture the higher-margins of being able to lock in customers to that bundled content.

Lower margins, lower prices. Even if they grow their customer base — highly unlikely, given our move towards wireless/mobility and their horrid balance sheets — the cable companies will be making less in five years than they are today.

So there you have it. A great way to play the App Revolution over the next five years is to bet against the CableVisions of the world.

Of course, I still maintain that the best way to profit on the App Revolution is to start a company yourself that can benefit from it, like I have done with AppConsumer.com. We’ve added several new sections in the last week — including:

• Funny App Videos (Warning: Some contain mature content)

• App Video Reviews (Hundreds of the best app video reviews)

And here are some of the best Top 5 Apps Lists that we added to the site just so far today:

Android-

• Top 5 Best Free Finance Apps for Android

• Top 5 Best Android Apps for Personal Finance

• Top 5 Best Educational Apps for Kids on Android

• Top 3 Best Navigation Apps for Android

• Top 5 Best Android Apps for Remote Work

iPhone-

• Top 5 Best Stock Trading Apps for iPhone

• Top 5 Best Art Teacher iPhone Apps

• Top 5 most useful jailbroken apps for the iPhone

• Top 3 Best Push-To-Talk Apps for iPhone and iPad

• Top 5 Best iPhone Camera Apps

Others-

• Top 5 Realtor Apps for Blackberry

• Top 5 best free apps for Nokia N8