Cutting the Cable-TV Cord? Maybe Some Day

Fear and rebutting at the Future of TV conference in New York City

By  |  Monday, November 22, 2010 at 6:50 am

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.


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11 Comments For This Post

  1. jltnol Says:

    Sorry, but I disagree with the author. With the advent of digital broadcast, most people have no idea how BETTER the pictures look over the air, all for free.

    I went from cable with a DVR, including Showtime and HBO for about $100.00 a month, to OTA, with an Elgato setup for timeshifting. Total cost of the Elgato, about $125.00. So within two months, I was already ahead of Cable, price wise. What to do about my pay channels? Netflix. Yes, it take longer to get them and see them, but in the end, it is still MUCH CHEAPER than cable.

    As the economy continues to improve, but very slowly, people will continue to look for ways to cut back, cut down, and cut out. Overpriced cable is only the start.

    Plus, I'd add there isn't much to watch on TV to start with, so its not like your really missing much.

  2. JohnFen Says:

    “With the advent of digital broadcast, most people have no idea how BETTER the pictures look over the air, all for free.”

    True, but in my experience, most people don’t actually care how much better the pictures look. TV long ago became good enough, quality-wise, for the majority of folks.

    You’re right, that people are looking to cut back expenses, and cable is often on the chopping block. The people I know, however, aren’t replacing it with broadcast TV (most folks I know don’t have the equipment to receive digital TV if their cable box goes away in any case, and don’t care). They’re replacing it with Netflix and a whole bunch of nothing.

  3. Sean Captain Says:

    OTA broadcast is indeed a great option for some networks, but it just hasn't caught on with many consumers. Nearly all TV watcher have cable, or satellite.

  4. The_Heraclitus Says:

    For people who can still afford cable, "cutting the cord" is about as viable as Boeing "clipping the wings" from its line of commercial airliners.

  5. Grog Says:

    Ridiculous. I can easily afford cable. I can also afford to pay $70 a month for a box of rocks, but I don't need them either. As the previous poster pointed out, theres really not much to watch anyway. I finally realized that my endless channel surfing did not constitute "watching TV", so I decided I'd had enough. We cut the cord a few months ago and don't miss it, my teenage kids and wife included. I get enough OTA (30+ channels) with my rooftop antenna, and for ESPN there are a half dozen sports bars within 1 to 5 miles of my house, which is where I have always watched most of my sports anyway.

  6. Snap Says:

    There are lot's of people out there who are paying for SD cable in areas where you can pick up free HD network feeds on the fillings in their teeth. That is just a combination of ignorance and laziness. Add to that the fact that in many areas TV stations have failed to promote their new HD OTA broadcast signals. They have become dependent on retransmission dollars, and it may be their undoing.

  7. The_Heraclitus Says:

    The only problem is that N/W TV is pretty much just garbage.

  8. Cheap Sniveler Says:

    Many of these people grew up with pay tv and don't realize that OTA is a viable option. Pay TV has a big budget: they can convince viewers that the must PAY to get HD (DISH being the worst offender). OTA TV is free HD, but has an advertising budget of ME.

  9. dholyer Says:

    There is another medium for TV shows that has been let out so far as I see. And that is called Torrent's. And most popular TV shows can be found on this file sharing medium, You can even find Movies, but home made versions of movies may look even lower quality than the TV channel that you get from 50 miles away on the old Analog broadcast system.

    Torrents are another form of Video streaming in ways, but the more that have copies of the video the faster you will be able to get your copy. Also known as Peer to Peer file sharing.

  10. todaysdeal Says:

    Satellite TV software is not such a great compare as cable TV but its save huge money, At list over 1000$ a year,

  11. @m81d Says:

    Just want to add my thoughts in here. I'm a customer and employee of DISH Network and we do not want customers to pay for HD. We actually have a promotion called "HD Free for Life" that we offer new and existing customers to ensure they get the best value for their money. This is something DISH has always strived for – to be the best value proposition in the industry while providing world class service and programming.