It seems like we’ve all (well those in the industry!) become obsessed with the term “cord cutter”. It’s written about as if we are teetering on the edge of a cliff where the pay TV companies are suddenly going to cease to exist. Everyone is looking for the quarterly result that shows an inflection point that proves there is now a mass migration.
I’ve never bought into that. Changing from a satellite, cable or telco based TV system to an online alternative involves two things. A change in the experience; A degradation of the experience.
A change because the nature of sitting in front of an electronic program guide, thinking about TV schedules and surfing yourself to sleep is a very different experience to working out what you want to watch and then figuring out where to go to get it. One is passive. One is active. This has also been referred to as lean back and lean forward TV. Human beings have shown a huge degree of inertia when it comes to making that sort of change.
A degradation because let’s face it a traditional TV experience works exceptionally well. The technology just works and just works 99.999% of the time. No real technical knowledge is needed. You buy a TV, subscribe to a service (and usually someone else installs the set top box needed) and then sit on a sofa with a remote. And it never breaks.
The online experience is difficult. It is hard to set up. Difficult and sometimes incompatible software is involved. Software “updates” break things. Strange new devices might be involved. Yes, devices like the Roku are fantastically easy to set up and use. But they don’t provide access to everything. Nothing does. So to get a real replacement for traditional pay TV means cobbling together various systems, technologies and pieces of software. It is simply less convenient to set up and use. And needs some knowledge that isn’t available to everyone.
But here’s the thing. Those two things are the classic definition of a disruptive technology that creates the Innovator’s Dilemma. They are precisely why the current pay TV companies will make exactly the points I just made above … and then be completely by-passed by the adoption of the new technology.
So why did I start off saying I don’t buy the cord cutter fascination? Because the people that drive adoption of less-than-comparable disruptive technologies do so for particular reasons. And it seems to me that two of the most powerful are that they never used it in the first place or never paid for it in the first place.
Cord Nevers describe those people. Who are they? People like Len’s daughter and my children. They simply don’t understand the concept of appointment TV. They go to their friend’s houses and laugh at an electronic program guide which forces them to start to watch things part way through and that is difficult to navigate.
But Cord Nevers are also people in college. Individuals who were forced to access TV online because they couldn’t afford pay TV. (Here’s an interesting fact. Did you know many colleges provide a campus cable TV system? Did you know many are turning it off because they realise their students would rather get their content online?). These individuals now are experts in navigating the new technologies and also get the inherent advantages of the change from lean back to lean forward TV. As they leave college they look askance at the suggestion that they should now start to pay for TV. In fact they laugh at the suggestion. It seems to me this is what is the much more dangerous effect for the current pay TV industry. One that was underlined in a recent report. These are the numbers that we should look for as we scour data about subscription rates.
And by the way it is really easy for someone like me (a geek that builds services for this industry) to get a great experience online. The picture below is what appears on my TV when it is turned on.
I set that all up on a Mac Mini. The software is a Firefox plugin called Fast Dial. We operate it all with a wireless mouse that sits on the arm of our sofa.
I know the majority of you had your eyes glaze over half way through the prior paragraph. But it’s also why it’s highly likely my children will be Cord Nevers.