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Cable Providers Still Have No Answer For Netflix As Cord-cutting Accelerates (bgr.com)

Posted by timothy on from the tv-networks-is-a-funny-term dept.

An anonymous reader writes with this excerpt from BGR about the rapidly shifting roles of cable companies and streaming media providers: While cable providers over the past few decades have grown fat off of exorbitant cable packages that overcharge and under-deliver, the rise of streaming services like Netflix, Hulu, and Amazon Video are finally righting the ship and shifting the balance of power towards the consumer. Clearly, the cable industry is in the midst of a transition. Netflix in particular, with its ever-growing stable of original content, has proven to be a particularly painful thorn in the side of cable providers who are increasingly struggling to keep subscribers from cutting the cord. Now comes word via The Wall Street Journal that cord cutting isn't just on the rise, but is accelerating rapidly. Citing data recently compiled by eMarketer, the Journal relays that the number of households with cable 'will fall at an accelerating rate for at least the next four years, reaching a 1.4% decline in 2019, eMarketer estimates.'

4 of 247 comments (clear)

  1. shocker... by Ritz_Just_Ritz · · Score: 5, Insightful

    You mean consumers aren't willing to keep paying more for an increasingly ad-laden pool of mostly forgettable reality programming? Wake me up when it's over.

    The only reason I have any relationship at all with the cable company is that they're the only supplier of broadband Internet in my area. If that wasn't the case, I'd drop them tomorrow. Until then, I'll "subscribe" to their lowest tier programming because it would otherwise cost MORE to buy internet service from them.

    1. Re:shocker... by QuietLagoon · · Score: 5, Insightful

      ...Sports especially are one thing keeping people on cable; a huge percentage of Americans watch live sports,...

      30% of the people who receive ESPN watch ESPN.

      .
      Less than 10% of the people who receive YES channel watched 25% or more of the ballgames broadcast on it, and this was during the lead up to the playoffs.

      ESPN is having significant layoffs because of the people cutting the cord and not continuing to pay ESPN, running counter to what you assert. Some say they are cutting the cord because of the ESPN fees.

      I agree that sports are very popular, but sports channels should not be paid for by the people who do not watch them. The high sports salaries are being paid for by high sports channel monthly fees that everyone has to pay because ESPN is part of basic cable.

  2. They haven't accepted that they're in 2 businesses by Todd+Knarr · · Score: 5, Insightful

    The cable companies won't find a solution until they accept that they're in 2 businesses:

    1. The network provider business, where they supply the basic pipes that connect their customers to the world at large. This business doesn't deal with content except as streams of bits, and it lives or dies by it's ability to handle data to and from anyone anywhere. Users won't buy connectivity from a network provider that can't connect them reliably to whoever they want to connect to.
    2. The content provider business, where they supply content that users view. This business can't care who it's customers buy connectivity from, it has to be able to deliver content to anyone, anywhere. Again, users won't buy from a content provider who can't deliver the content they've bought unless they have no other options (and yes, pirated content is always an option).

    If the cable company limits it's content-provider customers to only it's network-provider customer base, it won't be able to take advantage of the scale of customer base of content providers like Netflix and Amazon. It won't have the customer base size to use as leverage to get licensing terms, and a smaller base means fewer customers to spread costs across and a higher per-capita cost. If they use their position as a network provider to try to force customers to their content, they're going to face even more of the backlash they're already seeing in support for network neutrality and for municipal broadband and other alternatives to their network access monopolies/duopolies. If they lose that monopoly position, they're done for.

    If they had the smarts, they could leverage their positions and their infrastructure into being real powerhouses. But they're too afraid of spending money and too locked into an MBA's focus on next quarter's results to do it, so eventually they're going to be wiped out by a combination of dedicated content providers like Netflix and Amazon and Google plus dedicated network providers operated as either public utilities or as an adjunct to a content provider who considers that aspect of their operation just a necessity for their content distribution and is happy as long as the network part pays for it's own operating costs.

  3. Cox's Solution: A return to pay as you go pricing by Anonymous Coward · · Score: 5, Informative

    Cox rep here.

    Our old solution: Flexwatch. It's a bundle that gets you starter cable, a free receiver, and HBO / Starz / Encore / Cinnemax for $26 a month for 1 year. That's basically $0.50 per premium channel for 1 year, and you get the on demand digital versions like HBO Go.

    The new solution we're moving to: Data caps that are low enough to nail cord cutters that will cost you about $30-40 a month in overage fees. They've gone live in Cleveland Ohio with plans on rolling them out in a few more areas to test, then nationally if enough people put up with it. Better: When you complain about the overage fees, we pitch you Flexwatch under the excuse that you'll use less Netflix that way.

    How is that not an Antitrust violation, given we're the only game in some of these towns? I actually think it is, but we'll see what the courts decide if we're ever sued.

    I don't recall the exact numbers, but IIRC it's $10 per 50 gigs over the cap. Which is why we vastly increased our speeds recently -- because Netflix, Hulu, etc will use more bandwidth if it's available, which will cause you to hit the cap faster, which with this new plan with make us more money.

    Oh, and if you ever have to call Tech Support, good luck -- we're now "Technical Sales" reps. Our entire job is to get you to buy Cable, Phone, or Home Security while fixing your technical problem -- the training of which amounted to "reboot your modem."