Cord cutting–getting rid of cable or satellite TV–is the buzzword du jour in the TV and electronics industries. Pundits have proclaimed TV dead, or at least dying00going the way of the recording industry, which went from pricey CDs to cheaper downloads and now to mostly-free streaming.
That was the juiciest topic last Friday at New York University during the Future of Television Conference, a gathering of TV brass such as the CEO’s of Showtime and Univision, senior executives from MTV Networks, Discovery, and Yahoo, and founders of Internet video startups. The subject also permeated Pepcom’s Wine, Dine & Demo tech show the night before, where about a half-dozen Internet-to-TV products were being shown.
The conclusion, at least to this reporter, is that cord cutting is about as real now as growing new organs in vats. Consumers will do it–but they won’t do it in droves just yet.
There are a few reasons why.
Perhaps most important: Few people want to do it (yet). Todd Cunningham, chief consumer researcher of MTV Networks (with about a dozen channels like Nickelodeon and Comedy Central), explained the results of a November poll by the Cable Association that summed it up. About 11 percent of Americans are watching TV online. But most of those online viewers (84%) are watching the same amount or even more regular broadcast TV than before.
Even if switching to online does become a mass movement, cord-cutters will have to grapple with reason number 2: They won’t have much to watch.
Networks are keeping a tight leash on their shows. HBO and Showtime, combined, have about 35 million handsomely paying customers. So why mess with that?
Of course, you can get streams at a few pirate sites like Megavideo (if you know how to find them). And you could buy episodes from iTunes, but most consumers downright resent pay per view. Netflix streaming has a growing selection of shows, but not enough to replace TV. You can also download a torrent. but again, regular folks can’t be bothered. They just get cable.
Even network TV shows more than a few episodes old are walled off, unless you subscribe to Hulu Plus (which virtually no one is doing). And if the networks ever find that Hulu is killing their business, they can shut off the spigot.
There’s another, big barrier to Internet video on the TV: The process generally sucks. Netflix is a hit on Blu-ray players and other devices, but most other services struggle. Google TV, once promising, has big problems.
OK, a search bar for video is great. But why does the interface have seven different screens? And what are all the icons on those screens?
What’s the difference between apps and shortcuts? Between the Spotlight and Sony Recommends menus (on Sony gear, of course)? As Harry said of the Logitech Revue, “In short, if ever a Google product needed a “beta” label, it’s this one.”
Maybe geeks will grok this stuff. But normal people can’t be bothered. “Women don’t want to set shit up…They can, they just don’t want to,” said Tobey Grumet Segal, tech reporter for InStyle, referring to Internet set-top boxes.
Also, why can’t we get online video from any of the Big Four networks on Google TV? Oh right, because they block it. The studios can give TV shows, and they can take them away.
None of this means that cord cutting won’t happen, but it will take a while. Networks and cable companies will fight hard to make sure they don’t lose money.
“It’s a great business,” said Showtime’s CEO Matthew Blank about the status quo. To go to streaming, he said, “You better be very certain that [your programs] are going to be more profitable,” than they are now.
And maybe they could. “It’s not about putting everything out for free,” said Boxee’s Avner Ronen. “People will be willing to pay for the content…I love HBO. I would love to pay for it. I have no option to get HBO,” at least not without a giant cable bill.
Though subscription numbers dropped a bit recently, most people may not leave cable. But what if the next generation never comes to it? Taking the students at NYU as an example, Ronen said that it’s not about cord cutting, but “cord-never-getting.”
If cable companies (which are also Internet companies) see new customers dropping off in a few years, they may take a different view. And if networks numbers drop, they will have to go along.
Said Frank O’Connor from Microsoft’s Halo team, “In ten years, you’ll be able to watch whatever you want, wherever you want, whenever you want.” That sounds about right.