Digital Cord Cutting

The cable industry must devise a strategy to cater to younger consumers before it’s too late to try

Before there was Napster or BitTorrent, the cable industry served as the original revolutionaries.

I was there. Thirty-two years ago, I was an affiliate sales rep for HBO. I remember meetings at Comcast where they used boxes full of equipment as conference tables. I remember the excitement of HBO’s early original series: “First and Ten” with O.J. Simpson.

Cable was the disruptive force, bringing greater value and access and options to consumers.

Now is not the time to rest on our laurels. Now is the time to use the same innovation that built the cable industry to create the experience that consumers — especially the young consumers — are craving.

What some want to call over-the-top TV is simply a digital distribution retail outlet. It’s just like cable, just like satellite, just like telco. We’ve gone through three platform changes over the past 30 years. The Internet is the fourth platform.

Our industry has never grown by avoiding competition. Competition has made every part of this industry better. Satellite is what forced cable to launch more channels, go digital and high definition. Telcos forced the rest of us to get better broadband speeds and adopt interactive and video-on-demand.

Change in this industry has been like immigration in America: Every new wave takes its turn being the bad guy. In the end, competition is lucrative for all of us.

There’s been a lot of attention on cord-cutting. But focusing on that is like buying cough drops for a man with a chronic cough without asking about the three packs of cigarettes he smokes every day. It’s a symptom of the problem; it’s not the primary cause.

This is the real challenge we face: We need to reach a younger demographic.

A slowly recovering economy, high unemployment, and huge student loan debts have created a generation that challenges our business models. If we don’t meet them on their terms, the fear is that they’ll find a way to get what they want, either legally or illegally.

Providing more value by truly putting customers at the center of our industry is our path to attracting the next generation of viewers. First, we need to make TV Everywhere a reality. It’s high time we admit TV Everywhere has not succeeded so far.

Right now, you can have Epix, HBO Go, WatchESPN and three different feeds of CNN on your iPad. But studies show that most people have no idea how to access them.

It’s because the industry has not delivered on getting the message out. It costs money — and nobody gets Nielsen or advertiser credit when eyeballs are watching content on those devices.

But if we’re really honest, TV Everywhere has been a failure because the industry doesn’t see an iPad as simply an additional outlet that’s portable. It’s a threat because we don’t have the technology to manage customer access in a simple way.

If your customers don’t know their authentication passwords or have different ones for every device, how are they supposed to access the programming you want them to watch on their terms?

It shouldn’t be this way. We can do a lot better.

Providing choice and control to reach the next generation of viewers, looking beyond the quarter to build for the long-term and embracing competition is how we avoid the fate of the music industry.

In the end, it comes back to an idea that rooted us three decades ago: commonality of purpose. We need to be willing to tap into the revolutionary spirit that built the cable industry and the entertainment industry.

And we need to be brave enough to disrupt ourselves before others disrupt us. That is how we make the media industry relevant for the next generation.

Mark Greenberg is president and CEO of Epix. This column was adapted from his April 29 keynote address at the Variety Entertainment &Technology Summit.

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