How ‘Cord Cutters’ and ‘Cord Nevers’ Became ‘Cord Compromisers’

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"When broadcasters make the decision to offer their content direct to the viewer, they do so in a financial model that isn’t that different from their existing cable and satellite agreements."

2015 will be a banner year for ‘TV Everywhere’ and delivery of television to smartphones, tablets and other capable devices. Make no mistake, it will happen.

But a look back at how the landscape has evolved shows, that for the very vocal “cord cutters” (those who seek to reduce their dependence on traditional cable channel bundles) or “cord nevers” (those who propose that they will never pay for a traditional cable channel lineup), the universe of content they sought at price points of their choosing never seemed to materialize. In both cases, it seems that perception has swerved far past and missed reality.

Changing perceptions on ‘the cord’ and connection

Let’s begin this discussion by eliminating the term “cord.” Why? In reality, the cord has morphed and become not only a cord but also a wireless signal. Think about it. Across a variety of age strata, whether it be grandparents, Generation X, or millennials, the pathway through which television reaches us has changed. Those of us on the upper end of that range have been part of the cable universe and its channel offerings since its inception. Those on the younger end of this range have seen their channel offerings expand exponentially, while the screens on which they watch has rapidly grown as well.  For this latter group, it was never a question of when they would cut the cord.  For them, the cord was never to be. They are a generation of wireless watchers. Most of the content they consume has, and likely always will be, delivered via wireless means. This means that the device has become essential to most, if not all viewers.

The wireless watcher may be consuming their television through a data connection provided by a traditional wireless provider like AT&T, Verizon, Sprint, or T-Mobile (in the U.S.). Another wireless watcher may be watching their channels via tablet on a WiFi access point in his or her home, or even on the go in a coffee shop or shopping mall. You see where I’m going with the notion that the cord proposition isn’t as black and white as some positioned it to be.

Photo by Leon Lee and used here with Creative Commons license.

Ultimately, any screen that renders television (whether smartphone, tablet, or smart TV) is connected in some way. The argument isn’t whether there is or isn’t a connection, but rather how the content is delivered, packaged, and priced.

The race is on to offer content direct to consumer.

Moving to the content we consume – 2014 ended and 2015 began with direct to consumer offerings growing by the week. Everyone jumped into the proverbial pool – first it was HBO, then CBS, later AMC and others. As we turn the pages of the calendar in 2015, we will see more and more broadcasters and networks offer their wares to viewers directly. Pricing will vary, depending on the content.

So what does this mean for the aforementioned cord cutting scenario? In short, a reality check. When broadcasters make the decision to offer their content direct to the viewer, they do so in a financial model that isn’t that different from their existing cable and satellite agreements. This is where I believe a disconnect has manifested itself. The cord cutting proponents have incorrectly assumed that broadcasters would offer their direct to consumer content at lower rates per subscriber/viewer than they do with cable/satellite distribution.

Now, they are faced with a world of choice that equals compromise and a cost structure none of them expected. With these a la carte offerings popping up at an average price point of $7, picking a few channels and absorbing the cost of a data plan through which to watch them generally ends up costing as much as a lower end cable offering.

Behind the scenes at the SF Emmys, live stream powered by Anvato and BeyondPix Studios, photo courtesy of BeyondPix Studios

Change means choice – and compromise

What this may mean for viewers is even more choice in the way of mini channel bundles on cable and satellite platforms as well as channel lineups offered directly.

We’ve already seen movement on this front. Dish Network was the first entrant to this race with SlingTV. It isn’t unreasonable to expect similar offerings to pop up soon. The compromise here though will be choice and concessions on type of content offered. When SlingTV debuted, many took issue with the very limited number of channels and lack of any sports content. The service has since added more content, but sports will likely be an exception for not only SlingTV, but similar services going forward. The reason is that the major sports leagues have negotiated massive carriage rights with broadcast networks that get passed along to the cable providers, which in turn trickle down to your monthly cable bill.

CBS’ direct to consumer offering today specifically excludes most sports content. This may, however, also open the door for a direct to consumer offering from the major sports leagues in the not too distant future. Might we see a subscription service from the NFL this fall? I certainly wouldn’t bet against it. The time is right, the technology is there to make a service a reality very quickly, and one could argue the consumer is prepared to pay at the right price point.

So this all reminds us of the childhood adage many heard growing up – “be careful what you wish for.”  As I’ve mentioned, choice, offerings and consumption models will continue to change significantly over the next several months – but that doesn’t necessarily mean that the incorrect assumptions of a content universe with limitless choice at desirable price points will emerge.  In fact, it isn’t likely to happen at all.  Or at least not without compromise.

Rainbows, unicorns, channel availability and actual mileage may vary.  

Matt Smith is presently Chief Evangelist for Anvato – the leading, turnkey platform solution that enables media companies, content providers and broadcasters with a robust, powerful and complete toolset to enable their content to reach any screen, anytime.