Sunday, September 8, 2013

So how many are watching the Walking Dead elsewhere...

They say that the marketplace will decide.  And so it shall.  And when it comes to television viewing, or should we say media usage, what the marketplace decides will effect all of us for the next 50 years.

Some in the marketplace are deciding to dump cable and satellite.  And what was once considered a statistical glitch has become a statistic to reckon with.  Combining the second quarter of 2012 and 2013, 645,000 cable subs dropped cable, or as insiders call it, “cut the cord.” 

Now Digital Trends also reports that a significant number attached their cables.
However and overall, 2012 marked the first time when cable lost more subs than they gained.

And Magna Global predicts that nine million households will cut the cord before we elect the next president.  Some say that estimate should be more like four to five million.  And with 100 million households, shouldn’t cable be doing more of an Alfred E Neuman’s “What me worry?”

Well, did you find yourself cheering on the cord cutters?  And was my wife, your spouse and many young people also among the cheering?  Anybody who made out a cable bill this month is thinking right now, "hmmmm."  And all who already disowned cable and satellite are thinking, "Only 645,000 canned cable?  What's taking the rest of you so long?"  Has your neighbor who only pays about $30 a month to watch all the TV he wants using Hulu and Netflix made fun of you yet?

Money magazine reports that triple play prices—cable, internet and phone—have jumped 20% over the last three years.  Keep in mind that overall inflation was about 2%.  76% said that if they had to cut budgets, pay-tv would go first.  And why not, with the average triple play costing an average of $273 per month.

So are there options? A la carte cable gets brought up in barroom discussions when all interesting topics have been exhausted.  A la carte would allow consumers to pick and choose which cable nets they get in their homes.  This, in theory, would cut our costs since we would not pay for all the cable nets we never watch. 

Is cable listening?  Yes.  And giggling.  Chief Operating Officer of 21st Century Fox, Chase Carey summed it up:  “A la carte is a fantasy.”  Carey claims that the current trend of bundling a bunch of cable networks together for our consumption is actually what the public wants. 

Speaking to 21st Century Fox execs, boss Rupert Murdoch pushed away fears of cord cutting and dismissed any move toward a la carte saying simply, "Let me be absolutely clear: Content is still king."
But where will we get our content is the question. Netflix’ new offering “Orange is the New Black” has an estimated 3 million plus viewers early in its run.  That is only 10 percent of the 29.17 million Netflix subscribers.  Netflix has announced plans to double its original offerings.  Many of those are already choosing to watch “House of Cards.”

And last January, Hulu recently announced its own foray into original programming.
So, we can’t do a la carte when it comes to cable.  But we can do a la carte with a lot of other programming.  We can pick and choose individual programs through Netflix and Hulu.  We can choose to watch sports online.  Cable denies us a la carte programming, but our media menu is shifting more to a la carte all the time.

Without cable and satellite subs, who will be paying for the production of "Walking Dead?"  Or "Duck Dynasty?"  Can broadcast and cable continue to produce programming when there are fewer watching and if they're watching, perhaps not paying?  Broadcast and cable are ducking such questions, at least publicly.

And by the way, when will Honey Boo-Boo cameo on "Duck Dynasty?" (an unrelated rhetorical question.)

As for cord cutting, Fox COO Carey acknowledges that the newly graduated college students who never had cable before may choose to not get cable.  Ever.  But Carey believes those statistical changes will happen next decade, not in the next three years. 

The result of cord cutting may mean fewer cable networks survive, fewer new ones get a chance or it could be that cable realizes that we can live without them at its current cost.  Maybe, just maybe, the following chain of events will take place:
1.  major sports, both college and pro, will realize the fees they charge to broadcast and cable are too high and will lower their costs, given so many subscribers are threatening to leave cable and satellite so...
2.  ESPN will be able to lower its expenses so…
3.  ESPN and others will cut costs to cable and satellite companies…
4.  and  this trend will allow cable to lower its expenses and its cost per subscriber leading to...
5.  much joy and more profits for cable and satellite.
Because we know that large companies always make wise decisions based on statistical projections given current trends. 
And we also know that Republicans will seek a centrist presidential candidate to accommodate recent polling trends and  Democrats will make gutsy decisions.    

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