What Customers Want

Why Cord Cutting Will Grow

television-sony-en-casa-de-mis-padresI have been thinking a lot about cord cutting and about my own TV habits. I know my habits have changed a lot over time, and everything I read and hear tells me this is happening everywhere. I’m starting to conclude that if the cable companies can’t find a way to provide content in the way people want to watch it that cord cutting is going to accelerate a lot faster than they are expecting.

I just saw a projection from SNL Kagan and that predicts that cable company video will remain a profitable business for a long time. They predict that by 2026 residential cable revenues will rise 8.6% to $117.7 billion. That assumption obviously assumes a continued loss of customers to cord cutting, with those losses offset by rate increases. But that kind of assumption assumes there is not going to be a fundamental change in the way that people watch video.

I’m a baby boomer, and so I grew up with the traditional TV experience. There was usually more than one person watching TV in our home, so once you started to watch a show you watched it to the end. You rarely channel surfed because we only had four channels growing up and somebody had to sit by the TV to manually turn the tuner. You sat through all of the commercials and the TV held your attention.

The first big change in my viewing habits came years later when I got a TV with a remote control. That’s the day I stopped watching anything other than sporting events end to end. I don’t know if this is more of a male habit, but I would surf every time I watched TV. I can remember many times when somebody asked me if I had seen a certain show or movie and my answer was always, “part of it”.

I eventually realized that surfing took most of the pleasure out of watching TV. There is nothing worthwhile about watching portions of sitcoms, old cop shows and infomercials. And so I eventually ditched my TV subscription. I had lost my desire to watch linear TV.

Now OTT has brought me a whole new world of video options. Our household has subscriptions to Netflix, Amazon Prime, Hulu, Starz, and HBO Go. During the winter last year I subscribed to Sling TV to catch football on ESPN. And, since I am interested in the OTT market I spend some time looking at as many OTT packages as I can. I’m still not a huge TV watcher and spend somewhere between 10 and 15 hours per week watching video.

I have developed new TV habits that I think are going to be problematic to the TV industry as a whole. Amazon Prime and Netflix bring me curated television. On the first day I used those services I went searching for things I wanted to watch. And both of those services then suggested other similar shows and movies based upon my tastes. I now have a backlog of things I want to watch that will probably last for the next year.

I have also grown totally resistant to commercials and am willing to pay to not have them. I know a lot of people binge watch – but I’ve never been in a hurry to get to the end of a series and so I skip between episodes of a dozen different series as my mood dictates. I love that Netflix keeps track of where I’ve been and I’m growing intolerant of any platform that doesn’t do the same thing.

For example, I don’t really care that much for HBO Go just because it’s not as easy to use as Netflix. HBO doesn’t keep track of what I’ve been watching and it’s up to me to try to remember the last episode of something I watched. HBO has some great content, but the lack of this one feature makes it much harder to navigate, particularly if I haven’t watched a particular show in a while.

I think there are a lot of people picking up these same new habits. Cable TV can’t satisfy me in the same way as Netflix and other OTT. I know that you can use a DVR and record cable shows to get a similar experience. I used TIVO for many years, which is even easier than most Cable company DVRs and it was still not as easy to use as Netflix. The DVR experience still makes a viewer spend far too much time leafing through the channel guides.

I just can’t imagine ever taking the time to scroll through a channel guide again. I wouldn’t watch cable TV if I had it for free. And I never want to channel surf again – that was always a colossal waste of time. I instead use my limited TV time to watch want I want in the order I want to watch it. I don’t think it can get any better than that. My gut says that if the cable companies can’t somehow duplicate this same experience they are going to lose a lot more customers than analysts are predicting. Younger viewers are already largely abandoning the traditional cable model, and now a lot of us older folks are doing the same. Analysts often speculate about why people drop cable. For people like me it’s not the price – it’s the cable experience that no longer interests me.

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