I love the vision of cord cutting. I hate it’s reality. In reality, other than for the technically savvy and people under the age of 25, cord cutting just makes TV-based entertainment really really hard. For the rest of us, it’s simply easier to deal with the cable/sat companies we tend to dislike, remain grumpy, and watch anyway. I originally posted the following as a long comment on this piece at NewTeeVee, then decided it was “blog-able”. Read the original post first prior to my rebuttal, otherwise this makes little-to-no-sense…
I enjoyed reading your post, but one opening question – Your predictions are “an option embraced by a large number of consumers” and “we’ll end the year with a substantial loss of subscribers”. I ask – what does this mean? Is a million households “substantial”? Is ten thousand a “large number”? This distinction matters quite a bit.
While I appreciate the vision of cord cutting, the simple reality check is this – the only market segment truly ready to “cord cut” is new college grads who don’t currently have cords. By and large there are no viable ways to get rid of a real cable/sat service that mainstream consumers can adopt. I maintain that the only thing truly dissatisfying about “cord” services today is the visibly notable compression in HD signals (it’s ridiculous). And now for a specific rebuttal to your points:
The economy: when the market actually crashed and unemployment spiked, cord cutting didn’t happen. Why would it happen 2 years later with a more stable economy and more ppl back to work?
Netflix: I love me some Netflix, but it’s far from sufficient to cut anything. Let’s face it, the selection for streaming is still so-so (at best) and nowhere near close enough to replace TV.
Retrans/fees: Consumers, for the most part, have no idea, and this is an industry issue, not likely to cause behavior changes.
New devices: For complete disclosure, I am biased ON the side of those who make these devices (in fact, I’m probably tied to more cord-cutting related ventures than anyone other than the guys making the chips and codecs!). And I am 100% certain that there’s not a single one on the market today that’s compelling enough for mainstream cord cutting (not debating which is better, etc, merely stating the obvious regarding the needs of early adopters and niche techies vs the mainstream). To be clear, I’m not voicing any opinion on the quality of the products (though I have many), they just aren’t focused on mainstream users yet.
TV everywhere failure: Inertia is actually on the side of the cable industry. They’ll continue to improve the service to “Acceptable” levels, and that’ll stifle any other innovation from having a real chance.
Bottom line is cord cutting is one of those things that sounds great right now, just like moving to Canada when Bush got re-elected in 2004. But in pragmatic terms, it’s just a major pain in the ass (though I am actually working on solving that problem as well, but that’s for later). I’ll put my chips on the “2015 or later” box.
ps – happy new year, my resolution, again, is to blog more. again.
The significance of cord cutting is that cable and satellite have now maximized their potential growth. It may only start out as a trickle, but it will build into a flood. 10 years ago we were all on dial up and using quicktime clips and real network streams, now we have Apple and Netflix. In 10 more years how far will the world evolve? It may only be the tech savvy and early grads defecting now, but telcos will have to think long and hard about raising prices anymore than they have. More elegant solutions are on their way, it may not be 2011, but it’s nice to finally have cord cutting as a legitimate option.
@Davis – maximized growth? you have got to be kidding me. first, on demand – growing by leaps and bounds. second, TV everywhere offerings WILL prevail. third, they’ll embrace “just enough” Internet services to keep true predators at bay for the next few years. Comcast TV is not the same as AOL dial-up.
Also, I do agree that change *is* coming – just not next year (see the last bit of the post?)
Not kidding at all, just wait last summer will prove to be the high water mark for the number of cable/satellite/telco subscribers. On demand growth may add a little bit of incremental revenue but won’t make up for the subscribers who leave. At this point the cable companies might be able to maximize revenue better, but it will most certainly come at the expense of the # members. As far as TV everywhere goes, it’s hard to see anyone choosing to subscribe to cable for access. Cables biggest problem is that a cord cutter can’t miss what they don’t have and if they can’t provide a tv everywhere only package for $10 – $20 per month, then it’s hardly competitive with the other options out there. Whether or not this happens in 11, 12, 13 or beyond matters less, it’s clear that it’s going to happen and while it’s fair to point out that the mainstream will be slow to catch on, I also think that this trend is already well underway.
OK, then I guess we agree to everything other than the reality of the timeliness of the “trend”. We are clearly not even at early adopter phase, so I see it more as “something that’s kinda sorta on the horizon”. Lots of time to see what happens, hard to write off the entrenched players here due to the immense money flow… Drinks on me in 2015 if I’m wrong. 🙂