“A flood of offerings following this model is deadly to the ad-supported linear broadcast model that’s the foundational business model behind Cable TV, which is why we’re about to hit the tipping point for cord cutting.
The focus on the competitive landscape in streaming, which is what all SA articles invariably do, completely misses this bigger picture. The more serious entrants there are in the streaming space, the faster the rickety foundations of Cable TV will crumble. As cord cutting hits the tipping point, tens of billions in annual subscription revenue is going to be freed as the mainstream consumer discovers that they really don’t need that $100/month Cable TV package after all. That flood of money will be pouring into streaming, which is why the talk about “competition” is grossly premature. We’re still in the early days of the streaming land-rush and there’s plenty of room for a number of winners who will be feasting on the carcass of Cable TV.
Welcome to the beginning of the golden age of streaming. In television terms, we’re still in the 1950s here”.
We have not exactly cut the cord ourselves, but all our TV comes through the internet, not a cable. Which comes to us through (drum roll) a cable (in this case, coax from Spectrum). We have a DirecTV Now subscription, which is internet-delivered cable TV. I have it to get to NBCSN to get my Indy Car fix, plus the occassional watch of CNN. But where we get the most value from it is how it gives us log-in credentials for many channel’s streaming ability, mostly for our daughter. Disney Now, PBS Kids, Nick Jr, etc. Our cable bundle gives us the ability to log into those channels and then stream on-demand past episodes. So in a way we’ve kept the bundle so that we can stream the channels.
Personally I’m not convinced that de-bundling is actually going to save people a lot of money. How many streaming packages am I going to have to subscribe to in a few years anyway?
Personally I’m not convinced that de-bundling is actually going to save people a lot of money. How many streaming packages am I going to have to subscribe to in a few years anyway?
Hi bjurasz. I covered this exact feeling last week and how this presents an incredible opportunity for TTD. As all media companies introduce streaming platforms, and as the price of subscribing to all of them adds up, some companies are opting for an AVOD option (Advertising Video on Demand). AVOD relies on ads (ie, commercial breaks) instead of monthly subscription fees. More opportunities for TTD indeed, and the company is very keenly aware of it…
“Personally I’m not convinced that de-bundling is actually going to save people a lot of money. How many streaming packages am I going to have to subscribe to in a few years anyway?”
I brought this up in discussion about Roku, but I’ve been thinking differently recently. I’m now wondering if people would be willing to spend more in the end if they can have all the content they could possibly want, split up amongst several smaller bills. Psychologically, no one enjoys paying a $100 cable bill, it feels like a lot for TV service. But nobody blinks an eye at spending $15 a month on Netflix. Add in a streaming ala cart cable service for $25 a month, a lot less than $100 so doesn’t fee so bad. $10 a month for Hulu? Who cares about $10 a month right? And the cycle continues. Disney for $8 a month. Cheap. Add in standalone stuff like espn or HBO and in total you’re probably not paying much less than your cable subscription, it not more, but it doesn’t feel like it. Do the majority of people keep detailed budgets and know exactly how much they’re spending on entertainment? Likely not. All they know is that $15 for Netflix is cheap, despite all the other stuff they’re paying for. I would also argue they’re getting much more content for their money as well using multiple streaming services. Most people only watch a select few channels out of the hundreds provided in their dish or cable package. Huge waste of money. I have never paid for cable but I just recently signed up for an HBO now subscription as I’m a big Game of Thrones fan. I have no problem paying the $15 extra a month because I’m getting exactly what I want from it. Even though we’re already paying for Netflix/Hulu/Prime/etc.
Companies could use ad supported streaming and still take viewers from cable by the simple expedient of reducing the number(time) of the ads. Many ad supported TV shows I have seen seem to be 1/4 ads https://www.marketplace.org/2018/04/30/business/television-t… commercial loads have been just ballooning over the last decade. It’s kind of hard to watch some programming these days. Brancaccio: I looked it up — 11 minutes an hour in some cases. Poggi: And sometimes higher on certain cable networks. It could go up to as much as 15 minutes an hour, which is a ton when when you’re watching TV for an hour Brancaccio: Come for the commercials, stay for the programming.
Which is way too much for me,I switch off, you just can’t follow the story of a drama. “Hard to watch” as one of the above said .
Make the assumption that I watch TV two hours a day and assume TV advertisers are paying the same as for the time as I am paying. That makes TV ads cheap. And they need to be cheap since 90+% of the ads never reach anybody interested in the product. That is amazingly inefficient. There has got to be a better way, hopefully it’s TTD.
Actually the price of services like Netflix seems a bargain to me, but free beats paid if you are short of money. But maybe not if the excessive number of ads make it painful to watch.
Personally I’m not convinced that de-bundling is actually going to save people a lot of money. How many streaming packages am I going to have to subscribe to in a few years anyway?
I’m not sure where I read this, maybe Jeff Green’s interview, but the fact that there are more and more streamers would imply that sooner or later the current ad-free ones will need include a low-price option with ads.
“Personally I’m not convinced that de-bundling is actually going to save people a lot of money. How many streaming packages am I going to have to subscribe to in a few years anyway?”
My cable bill shot up to 220.00 a month. Two boxes, one being a DVR, and bundled cable, internet and phone with Spectrum. Play an additional 13.00 a month for NFLX. Plus I have Amazon Prime. A rip off. Finally I had enough.
Went to high speed internet only. Spectrum gave me a 50.00 a month for a year special. Normally 72.00 a month.
So I have NFLX at 13.00 a month and YouTube TV at 40.00 a month for a total of 103.00 a month.
Apples to apples though, my cable package went from 220.00 a month, backing out Netflix and Amazon prime out of both, to internet and streaming 90.00 a month.
An alternative outcome to consider is, what is already happening. The cable companies are not sitting idly by and watching their cords get cut.
They’re adding direct access to Netflix, Youtube, Amazon Prime, Hulu, and sports - eliminating the need for Roku boxes.
They’ve negotiated with Netflix to NOT stream things that they want to charge $6 a rental for over “on-demand”.
They’re increasing prices on two-fer plays (Internet and IP phone) to make up the difference in people dropping their **** 600 channel cable packages that no one wants.
And they’re going to start packaging those services for at - or - slightly - less than the combined cost of all those services. It won’t matter to us whether we pay MLB $10 a month, Prime $10 a month, Youtube Live $40 a month AND Internet $80 a month, or pay Comcast …$140 a month for “Internet +full streaming video.”
The golden age of streaming it will be - but, it’ll still be coming through the oligopoly’s black boxes.
This becomes a much more likely scenario if cable companies are able to maintain their monopolies as ISPs. However, when 5G unrolls in force, cable companies are going to be facing a lot of competition from Verizon, ATT, etc.
There is no love lost on cable companies. I think if people have a viable alternative, they will make the switch.