Published on: March 18, 2016by Kevin Coupe
The Wall Street Journal this morning has a story about how "new research from Nielsen suggests that many users won’t wind up canceling their pay TV subscriptions, but instead will cut back on what they pay and then layer on streaming video services like Netflix." Only 22 percent of US and Canadian poll respondents said they were prepared to totally cut the cord that has connected them to traditional TV services.
Megan Clarken, Nielsen’s president of product leadership, says that "instead of cutting the cord, consumers are more likely to 'cord shave,' or shift to cheaper cable packages that offer fewer channels overall, but carry the ones they most want. 'For most viewers, online and traditional services are not mutually exclusive, but complementary,' Ms. Clarken said.
I'm not really surprised by these numbers, but also think that we have to be careful not to underestimate what is happening here.
I have a brother who has completely cut the cord, but I can't imagine doing that ... if only because it would limit my ability to watch Mets games, and I like being able to watch cable TV news, especially during the current silly season. So you can count me among the people who will keep the cord intact for the foreseeable future, but would be very happy to have access to packages that are more limited; there probably are only about two dozen channels that I actually watch, which means that there are hundreds that I don't need to be paying for.
What this really means is that traditional cable companies are going to have to rethink their business models because consumers increasingly are going to demand it. It is that simple ... and every business has to be aware of the trends that could force them to make fundamental business model changes for the same reason.
The other thing to remember is that companies like Netflix and Amazon and Apple are going to focus increasingly on live content, which will allow them to compete more effectively with traditional networks. Will there come a time when I can watch the Mets on Amazon or Netflix? I cannot imagine why not, and when it happens it'll be an Eye-Opener ... not to mention the beginning of certain death to those companies that are ignoring the challenge.
- KC's View: