AT&T, Verizon Battle As Broadcast Draws Cord-Cutters

"Test Man," the character who looks like a combination of a hipster and cable repair man, has uttered the "Can you hear me now?" phrase in Verizon spots for nearly a decade. On Sunday, he reappeared in a Super Bowl spot plugging Verizon offering the iPhone. His calling card cleverly jabbed AT&T, which has been much-criticized for spotty iPhone reception, as he held the device and said: "Yes, I can hear you now."

The voters in USA Today's Ad Meter didn't think much of him, with his spot ranking in the game's bottom 15. But sales executives at networks and local stations surely welcomed his reemergence.

It was a further signal that AT&T and Verizon are set to battle for iPhone supremacy by spending liberally on marketing, providing a "likely windfall," according to Wells Fargo analyst Marci Ryvicker.

After such ostensible dire straits a few years ago that had Disney's Bob Iger failing to defend the sturdiness of ABC's future, broadcasting's years ahead could be brighter than Justin Bieber's. Thanks, in part, to the marketing troughs at Verizon and AT&T and the automakers, which filled the Super Bowl with spots. But there's also dual-revenue streams from bounteous payments from cable/satellite/telco operators that will only increase. Plus, the Big Four networks and their affiliates seem better positioned to avoid the threat of cord-cutting than their cable brethren. In fact, if it becomes a widespread trend, they actually could benefit from it.



The cord-cutters who ultimately become happy with their decision need three things: an intimate knowledge of where to find free content on the Web; a Netflix subscription; and rabbit ears for TV service that grabs the major networks for free over-the-air.

Studies show people tend to mostly watch about 15 channels, with the Big Four part of that devotion. Within a 500-channel cable universe, they're watching about .03% of the line-up.

If they decide to drop the cable bill and put up with the laughable rabbit-ears décor, Big Four ratings could increase substantially. Viewers would have less choice, for sure, but how crushing would that be? Probably not much. All of TV's top shows would still be available, from "American Idol" to "Modern Family" to the NFL.

NFL fans cum cord-cutters would have to find something to do on Mondays, since ESPN's "Monday Night Football" would be beyond their reach. But that's a likely plus for broadcasters and "Two and a Half Men" ratings when Charlie Sheen returns.

Wells Fargo's Ryvicker was bullish on broadcast in reports Tuesday, partly because cord-cutting "only highlight(s) the importance of broadcast TV to this society." And, she indicated, going antenna-hip still allows for favorite cable shows free on the Web. ("The Daily Show," "Jersey Shore," "Conan," Duke vs. North Carolina hoops -- even Al Jazeera may be providing better coverage online of the Egyptian crisis than CNN.)

Executives at cable operators and networks continue to insist they are not picking up any notable cord-cutting movement. Just wait until today's collegians age up. How many favor their laptops over TV? Surely, they're also watching on iPads and iPhones.

Using 2015 as a baseline, what's the over/under on when an executive says: "We're starting to have to deal with some evidence of cord-cutting" -- when they'll tell worried analysts: I can hear you now.

Still, among all the players that could suffer, broadcasters might have an easier time adapting.

4 comments about "AT&T, Verizon Battle As Broadcast Draws Cord-Cutters".
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  1. Anne Peterson from Idaho Public Televsion, February 8, 2011 at 6:07 p.m.

    You forgot iTunes -- Living behind a hill, I don't have over-the-air anything, cable is a mile away and we were never convinced we wanted satellite. We read a lot -- talk even, have DVDs, found we didn't use Netflix enough to stay with it, but I can easily get more current TV shows through iTunes than we can watch, especially combined with public television's online video player on my computer's high-resolution wide screen.

  2. Kevin Barry, February 8, 2011 at 6:13 p.m.

    15 channels out of 500 available is 3%, not .03%.

    Also, I can't imagine a true NFL fan would do without MNF. Two and a Half Men would not be a satisfying substitute. You may be right about cord-cutting, and you may be wrong, but you offer nothing but anecdote by way of demonstrating your point.

    Broadcast's future looks about as bright as Justin Bieber's? Yeah, that sounds about right.

  3. Doug Garnett from Protonik, LLC, February 9, 2011 at 5:58 p.m.

    I agree with @Anne. I'm mystified that in these cord cutting discussions people forget a critical value that cable brings: reliability.

    Reliable signal (I'm NEVER going to go back to over-the-air), reliable access to programming, never have to do a web search to find what you know is there, etc..

    But, there's plenty of tech venture capital trying to convince people that the sky is green on this issue. And, sadly, they just might succeed.

  4. Warren Zeller from zeller marketing, February 10, 2011 at 2:02 p.m.

    Maybe you meant something different from this:
    The cord-cutters who ultimately become happy with their decision need three things: an intimate knowledge of where to find free content on the Web; a Netflix subscription; and rabbit ears for TV service that grabs the major networks for free over-the-air.

    You need an antennae and a digital box on every tv in your house these days. No more analog only tv available. This alone has moved millions of people to cable and satellite subscriptions in the last two years.

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