The Cord-Cutting Fantasy

"The truth is that the current TV system is a great deal for everyone."<p>No, it isn't. I cut the cord, and watch media on Netflix &#38; Hulu and buy 2-3 shows on iTunes. To get the same number of movies and series on TV I was paying for a $100+ per month cable bill. Now I'm paying $40 for internet and $8 for Netflix and about $6 per month from iTunes TV shows. So I get a better experience, can watch what I want when I want it, and pay about half of what I used to.

There's something odd about those numbers - if really _all_ of those channels, including ESPN, are too expensive to be financed by just their viewers at the current cost level, and each household would pay more for just the things they want... Where exactly does the money for those channels come from?<p>The logical conclusion would be that large numbers of people never watch their cable TV at all and just subsidize entertainment for the rest of us. I don't think I believe that, given U.S. entertainment consumption habits.

A la cart distribution is <i>good for consumers and content creators</i>, and is <i>bad for networks and cable providers</i><p>Consumers - Cheaper for <i>most</i> consumption patterns.<p>Content creators - Flexible release schedules, deep viewer analytics, more power over networks.<p>Networks - Only remain relevant as publishers and speculative content investors.<p>Cable providers - Each hour of TV viewed will earn more money, but less hours will be viewed. Quickly are turned into dumb pipes.<p>So what happens? Networks and cable providers are going to hold on for dear life, while consumers and creators are going to route around them.

The author's claim is that, if we split the price of our meal evenly, we'll all be better off than if we each pay for our own portion.<p>It may be true that splitting the price encourages us all to eat more, and pay less attention to price. That increases the demand for everything, and expensive options in particular (the lobster and filet mignon).<p>It's entirely possible that switching to a "pay-for-your-own-meal" model would reduce the amount of food people buy, and possibly even end with the expensive options being removed from the menu.<p>But our current situation isn't better for everyone--it's just better if you really like to eat, and especially if you really like to eat expensive things, because you'll be subsidized by the people who just get a salad.

"Last week, ESPN averaged 1.36 million viewers a day, which is 9.52 million for the week, or about 40.8 million for the month."<p>No, this is wrong. The linked article where this stat is pulled showed an average of 1.36MM viewers during prime time. That's only 3 hours of the day.<p>I'm not familiar enough with TV metrics to speak to this, but I don't think standard metrics that are public are going to give you the kind of data you're looking for here.<p>Just from anecdotal evidence, I don't see anyway that only 4.8% of cable/sat households tune in to ESPN at least once a month. I'd have a harder time finding a family I know where no one in the house watches ESPN than a family where someone in the house does.

If ESPN really is "the sole reason many people have cable", then why do only "4.8% of households" watch the network? There's something odd about this article.

Article is actually about unbundling, not cord-cutting. Author does not know what cord-cutting is.

"Except for one little problem: the economics of cord-cutting simply don’t make sense, for neither networks nor viewers."<p>I think he doth protest to much.<p>Cord cutting makes PERFECT SENSE for the viewer.<p>We haven't had Cable/Sat in our house for over 5 years. Don't miss it (or it's outrageous cost) a bit.

I've recently I stopped subscribing to cable services about a year ago for several reasons:<p>1) Poor User Experience 2) Too much mind numbing content 3) Price 4) Ad(s)<p>Poor User Experience<p>While this isn’t true across the entire industry the few places I’ve lived have had terrible set-top-boxes. It has never made since to me that I am forced to use an interface that looks like it was designed in the late 90s. The guide is slow and has very few customization options. Direct TV did have a pretty good guide when I briefly had satellite which isn’t available in my apartment. Past Cable Companies: Longview Cable TV, Suddenlink, Grande Communications Link to horrid cable box that most of the providers I’ve subscribed to use. <a href="http://telecomlead.com/wp-content/uploads/2012/10/motorola-settop-box.jpg" rel="nofollow">http://telecomlead.com/wp-content/uploads/2012/10/motorola-s...</a><p>Mind Numbing Content<p>I really don’t need to catch up on “Storage Wars: Texas”. After a long day, I found myself mindlessly scrolling through the guide and selecting some mindless show. I realize this there is other content available and I made the choice to watch the show. The point I am trying to make is that TV wasn’t contributing anything to my wellbeing. I’d much rather fire up a PC game and at least engage my brain while blowing off some steam. It feels wasteful to me to pay for 200+ channels and only utilize 3-5 I found myself watching less and less TV. I thought I would miss sports(ESPN) but I’ve found that I really don’t. It turns out that was just something I did to kill time. When I turn ESPN news is on @ a coffee shop, I realize how similar it is to CNN headline news. The newscaster regurgitates the same information in a new wrapper and explains why this is supposed to be “important”.<p>Price - Ads<p>Advertising was really the kicker. Commercials are so terrible. At the risk of sounding like a tinfoil hippie, I got tired of having the messages massaged into my head about why I need X new product to be a real man. Ford, lay off, I don’t care it is “Truck Month” again.<p>The experience of sitting down and watching TV has really gone downhill. I pay to use a poorly designed user interface which has the audacity to display Advertising on the guide. For me, I’ve never felt valued as a cable TV subscriber. So, I decided to cut it. Ad on the guide: <a href="http://imgur.com/wIctmj1" rel="nofollow">http://imgur.com/wIctmj1</a><p>I still watch Comedy’s like New Girl, Mindy Project and The Big Bang Theory. I’ve purchased all three seasons of “The Walking Dead”. I purchase season passes via iTunes. Who cares if I don’t see it the day it comes out? The great thing is, I get to keep these shows and I watch them Ad free. That is a BIG plus in my book. I haven’t done the math to see if I am saving money but I feel that I am getting what I want with the money I do spend. I can take my apple TV to any house with internet an instantly access all of the media I’ve purchased. That is awesome. To me, it is worth it to pay a bit more to strip out all the ads and have the convenience of watching it on a ton of devices.<p>My point is I want to “reward” a company with money if they provide the features I am looking for, in this case Apple + the Studios. I want the cable industry to change into something that belongs in this decade, so I give them less money. (I say less because they do provide me cable internet which isn’t bad.)<p>The end of the ramblings<p>I am not sure if there is “theme” or point I was trying to make here. I am an ex-unhappy cable customer. I love consuming media, the distribution methods just need to be tweaked to something that makes more sense in this day and age. I understand the author is trying to say it isn’t economically viable to cut the cord because the current system is the best for everyone but I just don’t buy that. I refuse to believe that.<p>At any rate, thanks for writing the article, I enjoyed reading it but I hope you are wrong.

AMC is a terrible example for this, because their shows are available on iTunes a la carte right now. I have 'cut the cord' and still get new Mad Men episodes thanks to iTunes. I can directly support the show--not even the network--that I like. That is the cord-cutting ideal. Consumers don't give a shit about networks and their profits, we want the content we like at a reasonable price in a timely fashion.

The numbers here don't make sense. Most people are paying $50 per month for cable, which supports the current industry. If they all switch to paying ~$50 per month in a different model (whatever it is), an industry of the same size will be supported.<p>The subscription "all you can eat" model is great. The thing that needs to change from current cable is that I should be able to watch it wherever and whenever I want (and pay not to have ads). The issue right now is that the contractual relationships are so complex that no one is able to cut through the mess to put together the right offering.

"Except for one little problem: the economics of cord-cutting simply don’t make sense, for neither networks nor viewers."<p>Actually, it makes perfect sense for the viewers - the networks are the ones that it inconveniences. People simply won't pay the increasingly high rates which are borderline ridiculous. You could get a nice used car for the same monthly payment of some of these internet/cable bundles.

The missing variable is the cost of providing content 24/7. In an on demand setting, I imagine total revenue may drop, but production costs would also drop.<p>I may be way off base though. Does anyone with more experience wish to correct me?

The economics remind me of trying to cut government spending:<p>&#62; Only 4.8 percent of households watch ESPN. If ESPN were only available a la carte, each of those households would have to pay $101.60/month for ESPN to achieve the same revenue numbers they do currently &#62; The 95.2 percent of households who don’t watch ESPN would only see their cable bills decrease by $5.13 were they able to exclude it<p>Is like: Cutting XYZ program would significantly hurt a small group, who understandably protest. It would save each taxpayer only $1 a year. So it probably doesn't get cut.

Aereo.com just launched in Boston last week. I was excited thinking, _this_ is how I can cut the cord and still watch sports. Then I realized how little sports is on broadcast anymore. Try watching hockey playoffs.

People who think they want a la carte pricing have no idea what they are talking about. This post makes he case nicely.

Even assuming the numbers here are correct (and I'm rather skeptical) it means that channels like ESPN are getting heavily subsidized by cable subscribers who aren't interested in that content. That's not a win to me. That's my money going to produce shows that I don't like and don't want to watch.<p>If ESPN is unable to sustain the level of content/quality they currently show without huge subsidies, they shouldn't be making it. The subsidy to ESPN implies that channels and shows that I DO WATCH are not receiving a fair amount of my bill for the time I spend watching them.<p>This is not a "better for all" type of socialism. It's a "better for the entrenched" type of taxation.<p>To reiterate a common theme in the comments: "A la cart distribution is good for consumers and content creators, and is bad for networks and cable providers"