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

    by Matt Smith
    April 6, 2015

    The following piece is a guest post. Read more about MediaShift guest posts here.

    Click the image for the full series.

    Click the image for the full series.

    "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.

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    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.

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

    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.

    Tagged: anvato Cord Never cutting the cord streaming television Television 2.0 tv everywhere
    • cordcutter1010

      But when SlingTV debuted it DID have ESPN and ESPN2, that was what made it a big deal. It was the first time that an OTT provider had ESPN product in their line-up. Since then they have added a sports package that for $5 includes ESPNU, ESPN News, Universal Sports, beIN Sports.

    • Disqus User

      I can’t figure out whether authors of pieces like this are shills for the cable companies or just don’t get it. I pay a LOT less for TV than I used to and have access to much MORE content that is on interest to me than ever before.

      As to ISP costs. I’m actually paying $5/month less now than I did before I cut the cord, and I have a bigger data package and higher speeds. In other words, this isn’t an additional cost.

      As to Netflix and Amazon, I had those plans for a couple of years before I cut the cord, so that’s not a new cost. Indeed, most of Netflix customers are still subscribers to pay TV and most Amazon’s subscribe for the free shipping. Again, no additional cost.

      I now get 31 OTA networks with an antenna.

      I get 20 additional networks with the Sling TV, which I can cancel at will.

      I get about 25 free linear channels on my Roku.

      That’s 76 linear channels for $20/month. There is no TV plan where I live that is that cheap (other than for the first year, after which it doubles and I’m contractually bound for two years, so the actual cost is about $30/year or 50% more than I’m paying.)

      I’ve added Acorn TV for an additional $4/month ($50/year).

      I can watch one free game a day on MLB.TV.

      With Vudu, I can purchase season passes to just about any TV show I want which is not otherwise available to me.

      The author needs to spend more time studying how this actually works.

      • notsofastnow

        I wonder the same thing myself. What these analysts fail to realize is that most Americans who pay for cable also stream. Netflix accounts for 30% of all evening Internet traffic in the U.S. So when people cut the cable, they’re only ridding themselves of the most expensive, least satisfying portion of their TV entertainment options.

    • gr1755

      You can’t count the internet towards the cost of TV most people already was paying for that in addition to cable. And I have had a Netflix account for years so that doesn’t count. I dropped cable the TV portion was costing 120 a month for 4 DVRs and boxes for 4 TVs. I now 1 antenna hooked up to the same 4 TVs and a htpc as my DVR and it costs nothing a month. I added Sling tv for sports so I have ended up saving 100 a month and still watching all the shows I watched before. No compromise.

    • JavaJohn

      Mr Smith is not taking into account how important OTA broadcast TV is to the whole “cord-cutting” equation. Without the local network affiliates,
      local news, weather, sports, etc. can be difficult to get.
      I estimate that my family spends about 60% of the time on our OTA DVR and 40% on the streaming services. Without good OTA reception, I would still be a satellite TV customer.

    • notsofastnow

      Before I cut the cord, I was already paying for Hulu Plus, Netflix, and I had long been a member of Amazon Prime. In other words, I was already streaming most of my viewing, because streaming sites offered superior, commercial free content.

      So when I gave Comcast the heave ho, my only new cost was Sling TV — $20 a month. Total monthly savings: $95, but I’m investing some of that savings in a streaming device with Kodi, Playon TV, and other things to broaden my options and enhance my viewing experience. I’m still paying far less than I did with Comcast, which offered me trash TV and 30%’ads.

    • Carol

      Well I have not cut satellite yet I have amazon prime, netflix, and my husband also subscribes to the NHL and sling international for Cricket the only sports he watches . We stream 80 percent of what we watch and the other 20 percent we could get with a antenna so if we did cut satellite I don’t see how we would need to count any of the services we have already been paying for against our savings in fact our only additional cost would be a one time charge for a antenna and a ota dvr. The only reasons we haven’t turned off satellite tv is we are afraid that the time will come that fees for internet will go way up and that data caps will become a real problem and right now our satellite tv is cheap we are grandfathered into a package no longer offered

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