In some of the nation’s biggest markets, there’s probably more talk about cord-cutting than ever by rank-and-file viewers. The carriage squabble between Time Warner Cable and CBS may have made people bitter toward one or the other or both corporations, but, I’d bet, it’s mostly made more people begin wondering about the alternatives. After all, that cable bill is huge.
It might be when the retransmission issue is decided Time Warner will have permanently lost many, many more customers than it probably ever imagined.
Now comes this: According to a new study, by age 24, after young adults have left home and gotten onto the day-to-day of life, a whopping 89% of them have subscribed to a cable/telco pay service of some kind. But, says The Diffusion Group (TDG) in between college/leaving home and beginning to adopt familiar grown-up habits, 38% delay a cable subscription for some period of time, and nearly 11% don’t buy into cable/telco service at all. That’s nearly half, more or less up in the air.
Right now, Netflix, Hulu, YouTube and more online service are expanding the choices those so-called “pay-TV delayers” will have. Smart Tvs and OTT devices are making it easier.
"In the next five years, growing competition from virtual operators will test incumbents' longstanding position as the default home TV service,” writes Michael Greeson, president and principal analyst for TDG, which has just released, Late Millennials: A Study in Media Behavior. (I think he’s giving the incumbents about three extra years.)
And he predicts the fallout from the CBS/Time Warner negotiation war will be significant turning point. "When these negotiations are resolved, the entire television industry will know who has the real leverage,” his report says. “Content will indeed be king, if only because incumbent operators are no longer the only conduit capable of reaching the TV."
It could be that the best thing the broadcast and cable industries may have going for them is the fact that most Americans say they get most of their news from TV. So they may be less aware of cord cutting than you might think--cable and television station newscasts probably aren’t drumming the idea of cord-cutting as frequently as print and Internet news sources.
It’s true that tech Web site news stories depict cable defectors like a horse that is galloping out of that barn door at top speed. But when CNN.com published a story on cord-cutting recently, that horse seemed to be simply neighing disagreeably.
“Steep cable price hikes could soon make cord-cutting a reality” was the headline on CNN’s Web site earlier this month, with this subhead: “Cable subscribers are as mad as hell, and maybe -- just maybe -- they finally aren't going to take it anymore”.
On Aug. 6, the same day CNN.com was treading lightly on that, AllThingsD’s Peter Kafka was writing about top-flight analyst Craig Moffett’s confident conclusion, carried as the headline of Kafka’s story: “Cord Cutting Used to Be a Myth. It Isn’t Anymore.” The next day in TechDirt: “Pace Of Cord Cutting Continues to Quicken” referenced the same Moffett report. Said the Dirt, in part, “...even once television stations faced the facts and attempted to embrace streaming, they did so with the kind of guile and tact you'd expect out of a drunken giraffe.” (OK, any giraffe readers disturbed by that old stereotype? Well, hey, I’m only reporting. If you seen earlier paragraphs, you see I deal mainly in familiar horse similes.)
Bottom line: These carriage disputes usually result in a kind of temporarily scorched earth for the station involved and the cable operators. But in a rapidly changing media environment, CBS, but most likely Time Warner, could lose big. And online video could be the big winner.