How Cord Cutting Is Signaling "Innovate or Die" To Traditional Media - Cheddar Explains

Summary

Cord-cutting is rapidly transforming the media landscape as traditional cable companies struggle to adapt. The average cable bill has skyrocketed past inflation, pushing more Americans, 22 million by 2018, to sever their ties with traditional TV. Streaming services like Netflix and hardware developments such as Roku and Chromecast have made streaming more accessible, directly challenging cable's dominance. Consumers are increasingly opting for 'skinny bundles,' tailored content packages that are more affordable and reflect viewing habits. The industry now faces the additional hurdle of 'cord nevers,' a generation growing up without traditional TV. While some cable companies attempt to pivot with streaming offerings, the question remains: is it 'innovate or die' time for cable?

Highlights

• Average cable bills in the US have drastically increased, prompting many to cut the cord 📉
• The rise of streaming services like Netflix began significantly impacting cable subscriptions around 2007 📺
• Streaming hardware evolution allowed viewers to easily access content on TVs, further reducing cable's appeal 📡
• Skinny bundles offer more affordable and customized channel packages, challenging cable's one-size-fits-all approach 📦
• Cord nevers, a generation uninterested in traditional TV, represent a daunting future for traditional cable 📱

Key Takeaways

• Cable bills have increased at a rate four times higher than inflation, making it too pricey for many consumers 📈
• Cord-cutting has reached 22 million Americans by 2018, with cable losing over 4% of subscribers 📉
• Streaming services like Netflix and Hulu offer tailored viewing experiences, making cable feel outdated 📺
• 'Cord nevers,' the generation growing up without traditional TV, are a growing challenge for cable companies 🚫
• Cable companies are slowly reacting with their own streaming services, but it might be too late for significant change ⏰

Overview

Over the last few years, cable TV has found itself in hot water as the rise of streaming services takes over the entertainment world. Not only have cable prices outpaced inflation, but the ever-growing options for on-demand content have made traditional subscriptions look increasingly unattractive. Streaming platforms have rapidly evolved, offering consumers the ability to watch what they want when they want, pushing cable companies to the brink of irrelevance.

Streaming services like Netflix flipped the script on traditional media with their convenient, on-demand model that became a game changer. From its infamous DVD rental beginnings, Netflix, along with other SVOD services, moved to online streaming which coincided with a plummeting number of cable subscribers. The nail in the cable coffin? Streaming sticks and devices like Roku, Chromecast, and Apple TV, which allowed people even more freedom, letting them watch shows on the big screen without the cable hassle.

Now, cable faces an even bigger challenge: the 'cord-nevers.' Unlike previous generations, this group never bothers with cable and finds everything they need on platforms like YouTube. Meanwhile, cable attempts to retaliate with streaming options like Xfinity Stream, yet the questions persist— are these moves enough, or is the cable era on its last leg? As media continues to democratize, it's a fight to either innovate or fade into obscurity.

Chapters

• 00:00 - 00:30: Introduction and Cable Pricing The chapter "Introduction and Cable Pricing" discusses the significant rise in cable prices in the U.S., highlighting that the average cable bill has increased four times the rate of inflation over the past five years, surpassing $100. It mentions the trend of 'cord-cutting', with 22 million American adults having canceled their cable services by 2018, projecting a loss of over four percent of subscribers for cable companies in that year. The chapter reflects on the historical impact of cable TV over the past 60 years.
• 00:30 - 01:00: The Golden Age of Cable The chapter titled 'The Golden Age of Cable' discusses the peak period in the year 2000 for traditional cable subscriptions, which reached 68.5 million. It highlights how telecommunication companies once dominated the media landscape, but notes that the situation has changed over time, leading to more options for consumers.
• 01:00 - 01:30: Lack of Competition and Service Issues The chapter discusses the lack of competition among cable providers in most parts of the United States, which leads to poor service and high prices. In New York City, although there are four providers, the choice is limited depending on one's location. This lack of competition allows cable companies to increase prices without improving their services, resulting in poor customer service standards, as reflected by telecommunication companies having the longest average hold times in any industry.
• 01:30 - 02:00: The Rise of Competition and Streaming The chapter discusses the emergence of competition for cable companies, marking a significant transition in the television industry. The backdrop is the economic recession of 2008, drawing parallels to the Great Depression. As the recession hit, traditional cable companies faced new challenges as they began to encounter real competition for the first time in over fifty years. This period also saw the beginning of a shift in how audiences consumed television content, moving away from rigid TV schedules to more flexible viewing options, highlighted by the introduction of streaming services like Netflix in 2007.
• 02:00 - 02:30: Streaming Hardware Innovations This chapter discusses the early days of streaming video on-demand (SVOD) services and the evolution of streaming hardware. Netflix, a pioneer in this space, launched their 'watch instantly' feature in 2007, marking a significant point in streaming history. As streaming services grew, so did the development of dedicated streaming hardware such as Roku, Chromecast, and Apple TV. Before their advent, streaming required gathering around a desktop computer, highlighting the considerable impact these innovations have had in transforming how viewers access content.
• 02:30 - 03:00: The Advent of Skinny Bundles The chapter titled 'The Advent of Skinny Bundles' discusses the impact of new streaming hardware on the traditional cable industry. By 2010, cable companies were already seeing stagnation in growth as subscribers began to prefer streaming services available through S VOD on their living room TVs. Although subscribers had access to over 200 channels, they typically watched less than 10% of them, indicating inefficiency in the model. This gap in consumer satisfaction led to the introduction of 'skinny bundles', over-the-top services offering a select number of channels or content, fulfilling consumer demand for a more customized and cost-effective solution.
• 03:00 - 03:30: Live Sports and Changing Viewer Habits The chapter discusses the changing dynamics of how viewers consume live sports and other television programs, particularly through internet-based services. It mentions the rise of services like Philo, which offers a package of 37 popular channels for $16 a month, allowing consumers to select channels they actually watch. The chapter also highlights how live sports programming, traditionally dominated by cable, is increasingly being incorporated into these internet bundles. FUBU TV is cited as an example; it started as a soccer-only bundle and now offers a broader selection of 80 sports channels.
• 03:30 - 04:00: The Rise of Cord Nevers The chapter explores the rise of 'cord-nevers,' a phenomenon impacting cable companies. With the advent of streaming services and platforms like YouTube, Generation Z is growing up without traditional cable television, unlike Millennials who were accustomed to channels like Nickelodeon and ABC Family. As these 'cord-nevers' begin to live independently, they pose a significant challenge to cable companies, intensified by subscription services requiring payments for undesired channels.
• 04:00 - 04:30: Cable Companies' Response Cable Companies are recognizing the trend of 'cord nevers,' people who never sign up for traditional cable services. By 2021, it is expected that 30% of Americans, approximately 81 million people, will not be paying for traditional TV. In response, cable companies are starting to adapt. In September 2017, Comcast launched 'Xfinity Street,' an $18 streaming service designed to compete with existing slim bundle packages like Sling and Philo. However, there's a concern over whether this response comes too late to effectively compete in the changing market.
• 04:30 - 05:00: Conclusion The chapter 'Conclusion' discusses the future of cable companies in the context of 'cord cutters' (those who cancel traditional cable) and 'cord nevers' (those who never subscribe to cable at all). The chapter invites readers to reflect on their own practices and share their thoughts in the comments. It concludes with a call to action to subscribe, indicating a focus on engaging the audience and encouraging interaction.

How Cord Cutting Is Signaling "Innovate or Die" To Traditional Media - Cheddar Explains Transcription

• 00:00 - 00:30 this graph shows cable prices by year the average cable bill in the US has increased four times the inflation rate over the past five years today the average cable bill is over a hundred dollars so are you surprised by this graph as of 2018 twenty two million American adults have cut the cord and it's estimated cable companies will lose over four percent of their subscribers in 2018 cable TV transformed the world and for almost 60
• 00:30 - 01:00 years telecommunication companies dominated the media landscape but times have changed and so have your options so what happened [Applause] welcome to the year 2000 the Golden Age of cable it's the year traditional cable subscriptions peaked sixty-eight point five million in total cable companies
• 01:00 - 01:30 had nothing to fear little did they know the stage was set for their demise in most areas of the US there is hardly competition when it comes to cable and in New York City even though there are four providers your options can depend on the block you live on this has allowed cable companies to raise prices exponentially without the motivation to improve their product take customer service for example telecommunication companies have the longest average whole time of any industry we haven't seen
• 01:30 - 02:00 anything like this probably since the Great Depression heat frustration here in 2008 as the country was feeling the effects of the recession it's also around this time that cable companies finally had a real problem competition we're gonna get five o'clock tomorrow only on channel 4 for over half a century TV schedules dictated viewer schedules but in 2007 although Netflix
• 02:00 - 02:30 had been around since 1997 they only launched their watch instantly feature in 2007 and it took off but they weren't alone other s VOD or streaming video on-demand services followed suit here is where we see subscriptions really begin to drop that's not all at around the same time we begin to see a rise in hardware prior to Roku chromecast or Apple TV if you wanted to stream something you've gathered around your desktop thanks to
• 02:30 - 03:00 this new hardware S VOD subscribers have the ability to watch streaming services on their living room TVs by 2010 cable companies were feeling the effects the industry's growth slowed to just above 0% and things were only getting worse for them on average American adults with cable subscriptions get access to over 200 channels but watch less than 10% of them enter the skinny bundle it's an over-the-top service that allows
• 03:00 - 03:30 you to pick and choose the channels or programs you want through any internet connection take Philo for example you can get a package of 37 channels for $16 a month channels you'll actually watch like HGTV Food Network Comedy Central and of course cheddar even live sports programming which Cable has long laid claim to is slowly being added to these bundles FUBU TV which began as a soccer only bundle now offers 80 sports
• 03:30 - 04:00 channels like NFL Network NBC Sports Network and NBA TV for $45 a month so the problem is more than just the price it's paying for what you don't want as cord-cutting continues to increase cable companies are now facing potentially their biggest obstacle yet cord Nevers while Millennials grew up on Nickelodeon Disney Channel and ABC Family Generation Z is growing up on YouTube now they're starting to live on their own and
• 04:00 - 04:30 they're not buying cable hence cord Nevers by 2021 30% of all Americans won't pay for traditional TV 81 million people in total finally cable companies are beginning to react in September of 2017 Comcast launched Xfinity Street it's an $18 streaming service aimed to rival skinny bundles like sling and Philo but is it too little too late
• 04:30 - 05:00 what's the future for cable companies are you record cutters or a court never let us know what you think in the comments below and don't forget to subscribe