TV Isn’t Dead or Dying, And It Doesn’t Need To Be Saved

It seems a week can’t go buy without my RSS feed being full of articles talking to the demise of the TV medium and its business model. This in the face of record profits by operators like Comcast, reports from cable operators of no subscriber losses of any significance and MSO’s seeing their average revenue per user (ARPU) growing every few quarters. Yet even in the face of all this data, many in the media seem to have a personal agenda of wanting to get others to agree with them that cable TV is a dying medium and that it will follow the downward spiral of the newspaper business.

Their arguments, if you can call them that, are almost always based on the speculation of products that don’t even exist yet, think Apple TV, or al la carte pricing, and they try to argue that one medium, like online video, will replace another service instead of being a compliment to it. Many are under the assumption that they know what consumers want and what they are willing to pay for and are quick to count new services as a disruptor, even if there are no customers. The media is so adamant about saying how much consumers hate paying their cable bills, even though we have the evidence to prove that so far, consumers have not voted with their wallets and canceled their cable in any large numbers. You almost never see any of these articles mention that there are more than 100M consumers in the U.S. who pay for cable TV or that to date, all combined, the cable TV operators haven’t even lost 1% of their subscribers in any one-quarter.

None of that seems to matter though because these days, if you write about the online TV business, it seems you are almost expected to bash cable TV and spend more time creating the title of your post than the actual contents. Many writing about the cable TV industry try to top one another with headlines that spew doom and gloom for the cable TV industry, using words like “death” and “dying”. Their motive is to entice a reader with drama, rather than to inform them of what’s really going on. Many write about how easy it is to cut the cord and speak to it as a viable alternative to cable, but then have never used the devices and platforms they are writing about. They aren’t hands on, don’t know how the services work, and the vast majority of those who write about the online TV space couldn’t even tell you the simple mathematical formula used to figure out how much bandwidth an online video stream takes up.

Probably eight out of every ten articles I read about the cable TV industry never seems to tell the story of what’s actually taking place with cable TV today. All the media wants to do is speculate about what could or may happen down the line and they are more concerned with trying to crystal ball everything, instead of looking at real data we have in the market today. Naturally every time I write an article like this I get comments from people who say that they are talking about the “future” and that I must be an idiot not to agree that the TV model will change. If by idiot you mean realist, I’ll take that as a compliment because change does not imply “disruption” or “death” like many suggest. And many of these authors are some of same people who were saying in 2007 that the cable TV model will be dead in a few years and that TV everywhere, Netflix and the Apple TV box would “kill” off cable. Five years later, none of that is true, TV everywhere is hardly deployed and Apple has only sold 5.5M of their $99 Apple TV’s in the past 21 months.

Today I read an article that started off by saying, “it was only a few years ago that it looked like TV was a dying medium.” Really? To whom? It didn’t look like that to anyone with any sense. While some might argue with my notion that many posts about cord cutting don’t contain lots of data, the problem is that the data they highlight is 100% irrelevant. Firms spend a lot of time and money to collect data from consumers who say they don’t want to pay their cable bill and want to cut the cord. But the only thing that matters is not how many say they “want” to do it, but how many actually do. Is anyone surprised that when you ask consumers if they’d rather get something for free instead of paying for it most say they would? That’s suppose to be the data to support their cord-cutting argument? It’s useless.

It reminds me of when Netflix announced their higher pricing. Analysts surveyed customers and then said that Netflix could lose up to 30% of their members because they were so up in arms about the higher prices. However when it came time for Netflix to report their numbers, Netflix didn’t lose a lot of members at all. Because complaining about not wanting to pay for something versus actually canceling the service are two very different things. But these are the kinds of meaningless data points writers use to try to sound rational, as if it gives them ammunition for their argument. I’ll go back to my earlier example. Why is it that the majority of cord-cutting articles never mention how many total consumers pay for cable or satellite TV? Go back and look at the last five articles you read about cord-cutting. I’ll bet you all of them didn’t give out that data. Because the moment they do, their title loses all of its punch and it’s no longer as dramatic as they made it out to be.

It’s also clear to see from most of the posts about cord-cutting that the writers don’t have any real understanding of how video is delivered on the Internet. They think of themselves as being experienced with technology but the fact is, most of them have never worked at a technology company. They are quick to talk to the content choices, syndication models and what consumers want, but not about whether any of these services can or will work from a technical level. Every time some kind of new service is announced, they don’t question the technology, what the quality is when compared to TV, how the service could scale, what the QoS is or how it actually works. Far too many hear how it works, might see a demo and then assume it could displace a large portion of an already well established offering like cable TV that has been proven at scale.

Today, far too many bloggers who cover the topic of cable TV and the impact online video is having write for headlines. Opinions are giving as facts, real data is ignored and unreliable data is quoted as scripture. Too many writers want to use words and phrases to always show the negative side of something, instead of telling the story of what’s really taking place. Look at how many authors spend so much effort to try and convince the reader that they should cut the cord and dump cable. Why? As a writer for a news outlet, that’s not their job. I believe the job of the media should be to tell a story and not to try and spend so much time and effort trying to get the reader to agree with the author’s opinion that cable TV is dead or dying. Give out the data, present the facts and then let the reader decide on their own. Trying to use doom and gloom to sell a story is a bad approach to take to editorial.

  • http://www.mportal.com Fady Lamaa (mPortal)

    Dan, I totally agree with you. While I feel that TV Everywhere and all similar initiatives will gain traction in the next few years, I don’t think they’ll have a major impact on the existing TV business for many of the reasons you mentioned. I’ve worked in the streaming/IP/mobile industry for many years. I use all the latest innovations/technologies/services and don’t plan to discontinue cable any time soon. The only exception is that I currently subscribe to additional niche content that’s becoming available online. I might terminate that subscription.

  • http://www.jet-stream.com Stef

    We are getting there but it is a slow process…
    Personally I see myself as an early adopter.
    I have Digital Cable, Satellite and IPTV.
    But only the basic packages, no premium channels.
    I also have AppleTV and many other devices and services.
    I actually hardly watch TV: news perhaps.
    I never buy VOD from my cable or IPTV provider: although it performs (QoS) their libraries are so small.
    I also never buy OTT content since it is still delivered over best effort networks. It is nowhere near broadcast grade, so it underperforms.
    I don’t download content because it is illegal and morally wrong.
    Funny enough, even though I live and breath streaming, I buy Blu-Ray discs to watch films and series.

  • http://www.layer3media.com Anil

    Dan:
    Agree entirely! And also maybe someone (you perhaps?) should talk about how streaming is not really working and IPTV is still pie-in-the-sky. I have been a pioneer in streaming video over the net and found that apart from a very few specific implementations there is no *viable* business model. Almost everything IPTV does or can do, Cable is already doing!
    So, I am zagging while everyone zigs, and creating the world’s first legal torrent video delivery service (no, not like Joost). It’s called L3 and you will be hearing a lot more soon. :-)
    Anil

  • Sal

    TV is the big one medium of communication and entertainment and I don’t think that this will face any big problem in next few years. There are many raise and fall is faced by the business persons but their solution is also discovered by arranging an event or assembly.

  • http://arnshea.blogspot.com/ arnshea

    Another excellent post. The transparently loaded poll as evidence is always a red flag when reading one of these “x might disrupt …” type articles.
    The internet needs a website devoted to tracking predictions quoted in the press. Estimates of “platform x gaining 14% marketshare by 2015″ only to find out platform x no longer exists in 2015. Prediction is *hard*; the farther into the future, the harder it is.

  • Watcher

    I cut my cable over a year ago and have not looked back. Saving $90+ a month for programming I do not care for or am not around to watch when it is on. A $60 antenna for free over the air programming. i.e. live sports and the occasional show or movie and I am happy as can be. Netflix, Hulu, on-demand viewing of shows I missed plus downloads for others make up my watch-when-I-want programming. I work in the broadcast/online industry and I am not alone. Many of my coworkers have cut their cords as well. Maybe we need to do more research? Perhaps the researchers have not polled enough of the right people?

  • JC

    This post is the truth. One of the most overlooked factors in the online video industry is that many of these broadband celebrities aspire to make it within the TV world. It’s never the other way around. As long as the best content is broadcast over the tube, consumer habits will never change. There was cable, then satellite, and now broadband. Just like satellite didn’t kill cable, broadband will fail to kill either but it will operate as simply an additional broadcast medium to the original 2. For those people that cut their cable to “save 60-100″ a month, you guys and gals are in a tiny bubble minority. Time to look around and realize there’s a much bigger world than the tiny one you live in.