osewalrus (osewalrus) wrote,

Briefly on Cable Cord Cutting

Cable operators (and Dish) have generally seen the number of basic subscribers drop. While some of these have migrated to telcos (and DirecTV), others haven't. While the numbers have remained modest for the pay TV market over all, it has launched much talk of "Cord Cutting" and whether subscribers are abandoning their cable subscriptions for online video or whether this reflects people no longer able to afford cable subscriptions. You can see some of the arguments here and a cute anecdote here.

My feeling is: why not both?

Cable ops care a great deal about the answer because the problems have different solutions. If the problem is cost, then you either don't care (because you are keeping the more profitable, high-end customers) or you need to develop low cost alternatives. If you think the problem is cord cutting, then you need to do more to prevent programming from reaching Internet so that folks don't have a choice. This is why cable ops and large content providers have accelerated their online authentication projects and are pushing to crowd out Netflix in a variety of ways.

But why isn't the answer both? Cord cutting can be coming from two directions. One is changing viewing habits, the other is economic necessity. In either case, it is unclear that enclosure/capture is a successful strategy for the long run. Viewer habits morph and change. Will a sufficient number of viewers continue to feel that they need to have access to the video available on cable/pay tv? Or will viewers gradually shift to being satisfied with whatever is available through whatever means they watch it? Will the strategy pursued by content holders to make it difficult to stream direct to the TV succeed? Or will it simply train people over time to saty on their computer or become more technically adept at DIY connections to the TV?

There are so many interlinked variables in this that attempting to predict the future in this area strikes me as perilous. I know what policies or business models I would like to see to throw things open, but I cannot tell what happens without them.

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