Confront the Causes of Cord-Cutting Now

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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  1. You Pay TV weasels cut your own throats. To many Discovery Channels all showing the same ol over run reruns. There WAS a time I loved the Discovery channels. BEFORE the reality craze hit.
    ALL the pay TV channels went downhill after that. Then Discovery added another rerun channel plus the OWN was added then they raised my rate another $10 a month. I was already paying too much. So I cut the cord. LOL Why pay for crap TV when I can get free TV.

  2. ByteTV says:

    I agree that OTT may be a growing forth distribution network and that poverty is a big driver for OTT growth. I also agree that PayTV home entertainment service provided by cable, satellite, and Telco could use a swift kick in the a#!. Consumption of Home entertainment is largely the same though. Given a choice the family that has PayTV would prefer to watch their favorite show from the comfort of their home and OTT is still largely replay TV and long tail movies which PayTV also offers. Technology that enhances our viewing experience is the real driver. DVR’s technology of time shifting entertainment drove many to cable mainly because people like to watch what they want when they want. Place-shifting entertainment is very convenient but the bread winner still likes to be enveloped in entertainment and you can’t do that from a smart phone or even a tablet. The better experience is in your home “theater” and when the kids grow up and have more money they will consume just like their parents, in the comfort of their home where they can escape from the real world and relax for an hour or two. That doesn’t mean that streaming on handhelds will stagnate but the reason for viewing changes to social rather than relaxation. Finally entertainment content is a monopoly by definition. If you want Lakers basketball you buy tickets of you buy cable. There is the small minority that will try and steal entertainment but most people will just pay the going rate. I don’t agree with comparing PayTV to the music industry. Music is consumed mainly by the youth where Pay TV consumers have more money and less time to figure out how to download pirated content. They would rather pay for the convenience of content aggregation. Content is king and content owners are dictating how their content is distributed and therefore consumed. Netflix has finally woken up to this reality and playing the same content game as other Paytv providers. If you provide the content they will subscribe.

  3. Cheryl lennig says:

    Perhaps the struggling youngsters cant afford cable!! I know many struggling oldsters who cannot!
    We would be thrilled to have ala carte choice of channels– you could keep all gazillion of the useless sports channels and charge us less.
    It is a cliche but many’s the time i have surfed all over our cable channels and come up empty.
    Cable is killing itself by being bloated, costly and dull.

  4. Rob says:

    A cost of $50/month for cable with 50 channels, where half are in a language I cannot understand, and the other half contains only a handful of channels I am actually even remotely interested in, ALL of which have commercials.

    In comparison, I can get Netflix with no commercials and I choose what I want to see.

    The cable concept is antiquated and should go extinct, as far as I am concerned. It stunk from the get-go. That is my opinion.

  5. William Hughes says:

    I’m no longer in that 18-49 year old demographic that Advertisers crave, but I am a “Cord-Cutter”. About 6 1/2 years ago I got fed up with what I was seeing on Cable-TV, as well as what I was paying for it. Prices have done nothing but go up, while the quality of what I was seeing do nothing but head south. Channel after channel straying from their niche, some even abandoning the kind of programming they used to be known for. Also commercial breaks increased in number, to the point where you’d see five minutes of programming, then four minutes of commercials. I finally decided it wasn’t worth paying for, and I got rid of it. After cancelling my subscription I used the money that was formerly used to pay the subscription fee to purchase programming on Home video, primarily DVDs. Lots and lots and lots of them. I have amassed a collection of TV Shows, Movies and Other Programming that will take me over 20 years to watch before I am forced to watch “Reruns”. I watch what I want when I want, and nobody butts in to hawk a product I’m not interested in getting.

  6. MYost says:

    It’s a little difficult to believe that entertainment STILL thinks the younger demographic is where the money is. It is a very outdated perception that young people choose brands and stick with them forever. It’s not true for anyone I know. My toothpaste alone changes every couple of years.

    Also, have you looked at the unemployment rate of your precious younger demographic?
    Take a look – it ain’t pretty: http://www.bls.gov/web/empsit/cpseea10.htm
    Why don’t you go where the REAL money is being spent.
    Women 55 and up who have collected money from more than a few husbands, are finally rid of their children and can spend on themselves (shopping and traveling) and spend on their very precious grandchildren.
    Do you have any idea how much money grandmothers spend on grandbabies? A LOT.
    Expand your perception a bit and your ass might get saved.
    I wish you luck with your cash-strapped, unemployed “younger, cooler people”.

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