Cut the dialog about cord cutting
Listen and you’ll hear it. Talk, chatter and hot sports opinions are creating buzz today about cord cutting. Rank and file are lining up, many pointing the finger at the media members who cover the television and technology spaces, saying that they have been hell bent on breathing life into this topic that never should have had legs. They point to this morning’s Comcast earnings call, where they reported growth in cable subscribers on the order of 50,000 plus. Pundits say this should extinguish the crazy talk from the rest of the video space about this hare-brained idea that subscribers everywhere are punting their cable boxes from balconies and front porches everywhere. ¡Viva la video revolución!
I use some mild bombast and a good deal of sarcasm on purpose because the dialog around cord cutting deserves it. I too agree with some critics who say that journalists and media members have used cord cutting to drive traffic, sell publications, and make you click on their stories for the better part of two years. It doesn’t take a qualified industry analyst to tell you that the sky is not falling when it comes to cable and satellite service providers. That sentence may not drive much traffic, but it is the truth. For anyone to suggest that there is a massive sea change underway where we all ditch our traditional ways of watching television and getting access to the shows that we like to watch (which cost millions of dollars to produce) is going away rapidly is ludicrous. But study the picture above for a second. Sure – selfies may represent the decline of modern society, but I digress. The audience in that picture represents a new tangle and challenge for service providers and programmers. More on that in a second.
Back to today’s chatter though – independent of the new subscriber numbers, are service providers faced with new challenges in keeping their subscribers happy? You bet – seven days a week and twice on Sunday. The problem in this dialog is in the details, specifically in the term ‘cord cutting’. These two words grossly overstate some minor trends being observed in the service provider space. Does the average DirecTV, Comcast or Time Warner subscriber want the ability to watch their channel package in or out of home on a smartphone or tablet? That’s a fairly certain yes. Do they also subscribe to Netflix? Often times, yes – there is overlap. Are some of them shopping around when their agreement is in a renewal window to see what they can get at different price points? This author is proof positive that this is a reality. There are also additional data points that feed this process too – I’m looking at you, land line. Perhaps the triple play bundle’s days are numbered, as more of us rely on our wireless (read LTE) devices as our primary mode of phone communication. This too is impacting how we assess and accept our data and television access options packages and pricing. One thing is clear though – traditional subscribers are embracing new ways to consume their content, but to say they are abandoning the legacy solutions in droves is sensationalism.
Now, on to the millennials and the wrinkles they are creating. We may not like them for their propensity to take a selfie every 76 paces, but they are changing the way that video is accessed in very disruptive ways. I’ve said it before and will do it again here – this is a generation of viewers who aren’t embracing the television viewing options or offerings of those who have come before them. The millennial will likely never watch an airing of SportsCenter. Why should they when they can see all the sports highlights they seek in their social feeds, generally moments after they happen? And just look to the recent Twitter-NFL linkup as evidence that the biggest ratings draw on television is looking to new platforms through which they can connect with the millennial and draw them in.
These viewers and their disruptive habits have been feeding this cord cutting conundrum. Some have called this group ‘cord nevers’, which is to say that they may never subscribe to traditional television packages as most do today. I’ve called them ‘cord compromisers’ because I believe that they will force change in the space, where they pay for access (read: data package) and either subscribe to new services like Fullscreen or DirecTV’s three tiered entrants. Today, this audience may be on Mom & Dad’s television dime (or at least their home internet and wireless plans), but in the near future they will have some discretionary spend and will want viewing packages and options that vary greatly from what we see in the market today. This is where the change will come from.
So let’s agree that the cord & content will change for one massive group of viewers, but last I checked, there is no giant pair of scissors snipping its way through neighborhoods, changing the way most of us watch television. Cut.
–The Anvato team