Debunking the Debunking of the Cable Cord Cutters

Traditional TV services shouldn't get complacent just because online video hasn’t demolished its business yet.

The August 23, 2010 edition of The New York Times features a big package on "The Sofa Wars," about the battle for living room entertainment between entrenched powers and next-gen Internet services. The lead piece (at least online) is a delightfully silly article that promotes the idea that "cord-cutting," or dumping cable or satellite television for watching only online video, is "perhaps the most overhyped and overanticipated phenomenon in tech history" and more than implying that it's never going to happen.

The entire story seems to exist because of the newspaper's own poll of 847 people that discovered that "88 percent of respondents paid for traditional TV service. Just 15 percent of those subscribers had considered replacing it with Internet video services like Hulu and YouTube."

The Times then goes on to bury the poll's inconvenient truth not once but twice: "Younger people, though, are more intrigued by the possibility: respondents under the age of 45 were significantly more likely than older ones to say they had considered replacing their pay TV service."

ClickerJim Lanzone, CEO of Clicker, a nine-month-old Web service that has taken a search-like approach to amassing a database of info on 750,000 shows in its aim to be the "TV Guide of the next generation of TV" (a bit of an overhyped metaphor, yes, but a useful one nonetheless), says that he started his company because "the future of TV is extremely fragmented and the calendar grid on your cable system is no longer applicable." On TV, there's one Food Network, but online, there are hundreds.

Lanzone takes a more nuanced—and intelligent—view of this emerging landscape by one, acknowledging that we're "so early," and two, admitting that it's silly to think solely about cord-cutters. "In the under-30 audience," he says, citing the most important group not only in terms of demographics but also of course advertiser desirability, "there are cable cutters, who had cable and dropped it; cable shavers, who have cut back on their consumption because of online and other alternatives; and cable nevers who will grow up only watching content online."

Content. The thing that came up again and again in our production of "The New Fall Season" package is that for creators and for viewers, younger ones in particular, there's just content. Younger viewers aren't brand loyal to a network and their overthought lineups. Why should they be? They're creating their own lineups, and that's why Clicker has attracted 1.5 million users a month and is growing 40 percent or more month over month. It works whether you want to watch free programming or pay for shows on iTunes or subscribe to Netflix or Hulu Plus. It works whether you want a box from GoogleTV or Boxee or your cable company or nothing at all.

What the Times piece ignores are all the other inescapable trends in the TV and Internet video space that feed into the inevitable erosion of the cable business' status quo. More and more TVs are Internet-enabled. Cable companies and content providers continue to play ugly games of chicken over network rights fees. Consumers lose every time, but tend to support keeping access to ESPN or Food Network rather than embracing the principled stands of the company fleecing them for $100-plus a month. Consumers, again particularly younger ones, want to watch "TV" on their phones, their iPad, and their laptops as well as their big screens. Even the cable companies appear to understand this, as evidenced by Verizon's iPad app demo last week. And they want to talk about it with their friends on Facebook, Twitter, or any of the emerging services trying to cater to creating shared experiences around TV online, such as Miso, GetGlue, Philo, or Clicker's relatively new social functionality.

Verizon iPad app

Is Netflix the new Comcast? Is Clicker going to become a cultural colossus the way the physical TV Guide was 40 years ago? I have no idea, but I also know it doesn't matter: Consumers finding what the shows they want and watching them when they want isn't going away. And doing it through the Internet will eventually become mainstream. I've been covering the Internet for 15 years and cord-cutting wouldn't crack my top-10 of overhyped all-stars. (Off the top of my head and in no particular order: virtual reality, tablet computing, augmented reality, portals, Web 2.0, push technology, artificial intelligence, virtual personal assistants, 3-D, and incubators that breed a new generation of companies in overhyped and overanticipated markets.)

You know what all these things have in common? They all still exist, and entrepreneurs return to the ideas underpinning them again and again, continually refining the offerings. And consumers get more comfortable with them over time.

No smart person is saying that cable TV is dead. Just that it's time to adapt.

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2 Comments

  • Phoebe Spanier

    I understood the NYT article as taking issue with the perceived pace of change, rather than the likelihood of change. But setting aside the results from that particular survey, there seems to be plenty of evidence for a more immediate shift - such as the pay TV industry experiencing its first ever subscriber decline. http://bit.ly/anvADR

    http://www.jinni.com

  • Conquistador

    Yes, but......

    While there are many quality online sources for video content, and everyone loves the idea of "eliminating the huge cable/satellite bill" - there's still an intractable problem: The telcos and the cable companies control the overwhelming majority of broadband access in the U.S - and they are both trying very hard to be content providers. Any trade-off they make in content revenue can easily be offset with bandwidth charges.