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The Cord-Cutting Fantasy

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Re: The Cord-Cutting Fantasy

#31

Post by apendleton »

9999 wrote: post #27
apendleton wrote: post #20

Earlier quoted context omitted.

At this point, though, there are too few people doing what you're doing to influence content creator behavior. Cable companies are probably making less per unit of content off of you than they are off of cable subscribers, but that's okay: the costs of making the content are essentially fixed, and are paid for mostly by cable subscribers. If they have to choose between getting dollars from you for content they've alr…

Netflix's move into creating content is specifically in response to cord cutters desires. Since they can't convince HBO to give them their content, they've decided to compete directly with HBO. Cord cutters are actually creating new content creators.

That may well be, but two responses: firstly, House of Cards, in particular, was exorbitantly expensive, and a huge gamble on Netflix's part that may or may not turn out to be sustainable in the long term. Second: Netflix is producing way less content than is available on cable. They produce less content than HBO, which is one cable channel among the hundreds that are currently available in the US. They'll never be able to match the breadth of content production cable can pull off, and it probably won't ever make sense for them to produce super-niche stuff of the kind that's available on non-general-audience channels (think the Golf Channel or Food Network). So they're a sort-of partial replacement for a tiny subset of content.

Re: The Cord-Cutting Fantasy

#32

Post by orclev »

pbreit wrote: post #13
darkchasma wrote: post #11

"The truth is that the current TV system is a great deal for everyone." No, it isn't. I cut the cord, and watch media on Netflix & Hulu and buy 2-3 shows on iTunes. To get the same number of movies and series on TV I was paying for a $100+ per month cable bill. Now I'm paying $40 for internet and $8 for Netflix and about $6 per month from iTunes TV shows. So I get a better experience, can watch what I want when I wan…

I get cable AND Internet for $55/month (including espn and amc). People who claim cable is expensive seem to be unwilling to lessen their bill.

Sure you can get basic cable and the slowest tier of internet for that price, but the cables companies intentionally structure the cable packages to insure that the majority of channels you actually want to watch aren't included in the basic package. I pay $80 a month for the fastest internet connection I can get, and nothing at all for cable because it's a complete waste of my money. Everything I want to watch is available either via Netflix or Hulu whenever I want to watch it, not when the cable company thinks they can wring the most ad dollars out of me.

Why should I pay exorbitant fees to get access to the same content I already have access to at times that are inconvenient for me?

Re: The Cord-Cutting Fantasy

#33

Post by ssharp »

cwe wrote: post #17

AMC is a terrible example for this, because their shows are available on iTunes a la carte right now. I have 'cut the cord' and still get new Mad Men episodes thanks to iTunes. I can directly support the show--not even the network--that I like. That is the cord-cutting ideal. Consumers don't give a shit about networks and their profits, we want the content we like at a reasonable price in a timely fashion.

One thing I hate about buying shows on iTunes/Vudu/etc. is that I don't want to OWN them, I just want to watch them. The $2.99 price may be fair for ownership, but for a show I probably only want to watch once before it's available on Netflix, $2.99 seems like a lot.

Re: The Cord-Cutting Fantasy

#34

Post by amalcon »

pbreit wrote: post #13
darkchasma wrote: post #11

"The truth is that the current TV system is a great deal for everyone." No, it isn't. I cut the cord, and watch media on Netflix & Hulu and buy 2-3 shows on iTunes. To get the same number of movies and series on TV I was paying for a $100+ per month cable bill. Now I'm paying $40 for internet and $8 for Netflix and about $6 per month from iTunes TV shows. So I get a better experience, can watch what I want when I wan…

I get cable AND Internet for $55/month (including espn and amc). People who claim cable is expensive seem to be unwilling to lessen their bill.

Where do you live? Cable Internet alone would run me a minimum of $50/mo. at the slowest speed, ignoring the introductory rate. The cheapest package with TV runs almost $100/mo after the introductory rate expires.

Re: The Cord-Cutting Fantasy

#35

Post by nemothekid »

groby_b wrote: post #4

There's something odd about those numbers - if really _all_ of those channels, including ESPN, are too expensive to be financed by just their viewers at the current cost level, and each household would pay more for just the things they want... Where exactly does the money for those channels come from? The logical conclusion would be that large numbers of people never watch their cable TV at all and just subsidize ent…

My hunch is OP's calculations are right, but his numbers are just wrong. I have a tough time believing ESPN only penetrates 4% of American Households.

Looking at his sources I think OP's error comes from the fact that he is using Primetime viewership as a metric. I'm going off assumptions here, but I would think that ESPN's major value add is huge number of people watch ESPN at all times of the day. SportCenter, for example, doesn't air during primetime, but airs continually throughout day.

Looking at the Primetime numbers, The History Channel scored higher than ESPN. However I would guess at all other times in the day, ESPN has a much, much higher viewing audience at other times of the day.

Re: The Cord-Cutting Fantasy

#36

Post by jenningsjason »

ssharp wrote: post #14
vonskippy wrote: post #6

"Except for one little problem: the economics of cord-cutting simply don’t make sense, for neither networks nor viewers." I think he doth protest to much. Cord cutting makes PERFECT SENSE for the viewer. We haven't had Cable/Sat in our house for over 5 years. Don't miss it (or it's outrageous cost) a bit.

Cord cutting sucks for people who like to watch live sports in the US. We've been cable free for a little over a year now and I've missed two sets of NBA playoffs. I chomp at the bit to watch playoff basketball for two months and finally get my fill when the Finals come and are put on a broadcast network (ABC). If I want to pay to watch the NBA playoffs without cable I can, I just have buy an NBA League Pass (which I…

Sports is how cable (and satellite) empires are built. Take, for example, the NFL Sunday Ticket on DirecTV. The NFL has sold exclusive rights, in the US at least, to DirecTV. Hardcore NFL fans, and there are a lot of us, wouldn't even consider cable, let alone cord cutting, until NFL Sunday Ticket is available through some other distribution network.

The same is true in the UK for Premiership Soccer, and I'm sure it's true for other sports in other countries.

Re: The Cord-Cutting Fantasy

#37

Post by aqme28 »

apendleton wrote: post #31
9999 wrote: post #27

Earlier quoted context omitted.

Netflix's move into creating content is specifically in response to cord cutters desires. Since they can't convince HBO to give them their content, they've decided to compete directly with HBO. Cord cutters are actually creating new content creators.

That may well be, but two responses: firstly, House of Cards, in particular, was exorbitantly expensive, and a huge gamble on Netflix's part that may or may not turn out to be sustainable in the long term. Second: Netflix is producing way less content than is available on cable. They produce less content than HBO, which is one cable channel among the hundreds that are currently available in the US. They'll never be a…

They produce way less content partly because they only recently got into the game. It's unfounded to say that just because they're a small fish means that they'll never be able to make content with neither the breadth nor specificity of other networks.

Re: The Cord-Cutting Fantasy

#38

Post by monkbent »

nemothekid wrote: post #35
groby_b wrote: post #4

There's something odd about those numbers - if really _all_ of those channels, including ESPN, are too expensive to be financed by just their viewers at the current cost level, and each household would pay more for just the things they want... Where exactly does the money for those channels come from? The logical conclusion would be that large numbers of people never watch their cable TV at all and just subsidize ent…

My hunch is OP's calculations are right, but his numbers are just wrong. I have a tough time believing ESPN only penetrates 4% of American Households. Looking at his sources I think OP's error comes from the fact that he is using Primetime viewership as a metric. I'm going off assumptions here, but I would think that ESPN's major value add is huge number of people watch ESPN at all times of the day. SportCenter, for…

Yeah, I should have been clearer. It would lower the a la carte price, but it would still be a pretty unsustainable number.

Re: The Cord-Cutting Fantasy

#39

Post by acgourley »

A la cart distribution is good for consumers and content creators, and is bad for networks and cable providers

Consumers - Cheaper for most consumption patterns.

Content creators - Flexible release schedules, deep viewer analytics, more power over networks.

Networks - Only remain relevant as publishers and speculative content investors.

Cable providers - Each hour of TV viewed will earn more money, but less hours will be viewed. Quickly are turned into dumb pipes.

So what happens? Networks and cable providers are going to hold on for dear life, while consumers and creators are going to route around them.

Re: The Cord-Cutting Fantasy

#40

Post by stonemetal »

apendleton wrote: post #28
vonskippy wrote: post #6

"Except for one little problem: the economics of cord-cutting simply don’t make sense, for neither networks nor viewers." I think he doth protest to much. Cord cutting makes PERFECT SENSE for the viewer. We haven't had Cable/Sat in our house for over 5 years. Don't miss it (or it's outrageous cost) a bit.

Like I said in a different response, cord cutting makes perfect sense for viewers as long as it's only a few viewers. The production of the content the cord cutters are watching is being subsidized by people who haven't cut the cord yet. That content might not be created in the first place if everyone went the cord-cutting route.

What makes you say that? Cord cutters still pay for the content they consume. All that is happening is we are trading one middle man for another (ABC, CBS, FOX for Netflix, Amazon, Hulu ) Cord cutter content prices will rise as the balance of power shifts.
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