Tag Archives: Cable television

April 23, 2014 · 8:30 am

New Data On A Shifting Market

Every so often we take a look at the cord-cutting phenomenon. This is the term that applies to the act of getting rid of your cable subscription,

Early 1950s Television Set

(Photo credit: gbaku)

or as is more frequently the case with young consumers, never having one to begin with. Since the folks at Experian Marketing Services just released some new information on the topic I thought this might be a good time to take another look.

As we’ve discussed here before, I think it’s probably too soon to tell if what we’re seeing in the data below as well as other data at which we’ve looked is a trend or a blip.  That said, I think we’re probably getting to the point, especially among young people, where we can begin to draw some conclusion and maybe to adjust our business plans accordingly.  Let’s see what you think.

An April 2014 survey published by Experian Marketing Services suggests that 7.6 million U.S. households, or 6.5% of all U.S. households, have now cut the cord–up 44% in the past three years. Ownership of an iPhone or iPad “noticeably increases the odds” that a household will cut the cord, Experian said. Experian notes that nearly 25% of adults between the ages of 18 and 34 who subscribe to a streaming video service like Netflix and Hulu do not pay for a traditional TV service. Experian also found that households who only watch streaming video on mobile devices are 1.5 times more likely to cut the cord, while those who watch streaming video on TV are 3.2 times more likely to cut the cord.

The above is taken from Cir.ca’s summary which also contains some other data points you might find of interest.  I think it’s pretty clear that whatever is going on it’s happening at an increasingly rapid pace.  It’s pretty apparent that as mobile devices – phones and tablets – become more able to handle high quality video streams the tether to the TV screen gets weaker.  The rapid growth of Roku devices along with Chromecasts, Amazon’s Fire TV, Apple TV, and other over-the-top devices, along with “smart” tv’s, has meant that well over half the homes have some way to access “television” on their TV screen without using a traditional cable service.  To me, that doesn’t bode well for the cable guys.

On the other hand, I’m guessing that most homes get their broadband internet service from the same people from whom they get their video service.  We’re already seeing Comcast and other providers marketing high-speed internet with a small dose of video, a very different approach.  Is the door open to others jumping in as Google has with Google Fiber?  Where are the WiMax folks?  Stay tuned – this isn’t over.  I am not sure where the trend line flattens out and the cord-cutting phenomenon stops, but we’re not there yet as this data shows.  What are your thoughts?

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November 25, 2013 · 11:09 am

Vampire Media

Let’s begin the week with another look at the declining state of my former business, television.

iPad 2 - Home Screen

(Photo credit: William Hook)

Now you might find it odd that I feel the business is in decline given that viewing of content created for TV (both network and cable) is pretty solid in the aggregate.  I agree.  I’m not one of those folks that thinks there’s nothing good on TV.  In fact, I think there’s more really excellent programming on than maybe ever before.  The issue is that it’s spread out among hundreds of channels, each of which we consumers are paying for in some way.  Unless, of course, they’re on a pay channel such as HBO in which case only a minority of homes have a chance to see it.

But that’s not our topic.  Instead, I want to talk about vampire media and their role in all of this.  No, it’s not a tome about “True Blood” and its ilk.  Vampire media refers to iPads, other tablets, and other devices which come out at night, generally in the home.  It’s through these devices that much of what was primetime viewing has shifted from the big screen and the major content providers to the small screen and other providers.  You’ll notice I’m not saying “small providers.”  YouTube is bigger than any TV network in terms of viewership and reach.  Most importantly for our discussion today, these devices do not require a cable to deliver video, just an internet connection.  The effect?

In just a year and a half, cable television providers’ share of the video market has declines from around 52% to 47%.  In fact, Nielsen‘s estimate of TV households has declined each of the last two years, the first time I can ever remember it ever declining at all.  Sure, the business remains solid for now, but that’s due to two factors – high ad rates masking the audience declines and the subscriber fees the content distributors take in.  In my opinion, that too will change in the not too distant future.  Higher fees are coming from a smaller user base.  At some point the economics of paying for a lot of content you never consume don’t make sense.  This admittedly long piece does an excellent job of summarizing all the numbers.  You should check it out.

The holidays are here.  More tablets, Roku boxes, Chromecasts, and new video consoles, all of which permit the viewing of most of the same content available via traditional programming services will be sold and received.  The vampires are coming out.  Have they landed at your house?

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October 16, 2013 · 8:44 am

The Early Warning System Is Going Off

There’s always a scene in movies about some epic disaster during which an early warning system goes off.  A young scientist believes a comet will hit the Earth but the older scientists tell him he’s nuts.  A tsunami monitor goes off when there are calm seas and the woman watching it disregards the information.  You know the drill.  As the audience, we know that disaster is coming but those who have the information are blissfully unaware until disaster strikes.millennials-broadcast

I thought of that as I read a couple of articles the other day.  The first is from the good folks at Poynter who reported on some research the NY Times did.  Quite an eye-catching headline:

Thirty-four percent of millennials surveyed watch mostly online video or no broadcast television, new research from The New York Times says.

Now granted, the study was among 4,000 current users of online video so one could argue, like the woman watching the calm sea, that the sample is skewed.  The again, given the high percentage of young folks that are online video watchers, I’d listen.  After all, cord cutting is no longer dismissed as the rantings of some early adopter lunatics.  There are numbers that prove it’s for real, especially since we’re not talking about “cord-nevers” – young people who never had cable TV – just a broadband connection for streaming.  As one report had it:

While 3.2 million new U.S. households were set up in the last three years, the paid-TV industry only added 250,000 subscriptions in that same period.

Not so good.  And if that’s not a loud enough alarm, here comes the near-miss fireball from out of the sky that gets everyone’s attention, courtesy of our neighbors in the Great White North:

The Canadian government will soon require cable and satellite television providers to make it easier for customers to buy only the channels they want rather than pay for bundles, the country’s industry minister said on Sunday.

“We don’t think it’s right for Canadians to have to pay for bundled television channels that they don’t watch. We want to unbundle television channels and allow Canadians to pick and pay the specific television channels that they want”

Sound familiar?  It should, since it’s the same fight that’s been brewing here for several years and which intensifies each time your cable or satellite bill goes up.  Cable executive are rightly scared that their penetration into the household base will fall, making subscriber revenues drop and ad sales impossible.

Young people tuning out in droves.  The fundamental business model under attack.  Have we reached the end of the TV world?  Not yet.  But in my mind the early warning systems are howling.  What do you think?

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