Mark Hughes
CONTRIBUTOR
I write about films, especially superhero films, & Hollywood.
Opinions expressed by Forbes Contributors are their own.
“Cord-cutting” has become the bane of cable providers’ existence, but the fast-changing face of consumer content is signaling dark days ahead for cable, as the option to avoid or drop cable service has grown more appealing and more popular than ever lately. The Internet, mobile devices, TiVo TIVO -0.60%, Netflix NFLX -1.67% and other streaming services, and other major disruptions to traditional TV and home entertainment mediums were already hurting the cable industry. But now, recent events have given rise to predictions that the era of cable may be coming to a close.
Netflix began producing their own original content in 2011 with House of Cards, and quickly ramped up the creation of new original shows, with dozens of programs and films in the works or already on the air. Meanwhile, HBO recently announced they will offer stand-alone service so customers need not have cable to enjoy HBO’s lineup anymore. This news was followed by announcement of a deal to carry HBO Now exclusively on Apple TV, but then came word HBO had also arranged a deal with some cable providers to offer HBO’s streaming service to customers as part of an Internet plan instead of as part of bundled cable content. Showtime is pursuing a similar path away from cable, too.
Cable Killers
Right after the announcement of the deal to carry HBO Now on Apple TV, The Wall Street Journal revealed that Apple plans to offer a streaming TV service that will include ABC, CBS, FOX, FX, ESPN, and 20 other broadcast channels to start. The pricing will fall be $30-40 each month, and it’s expected that the plan will also include VOD streaming service alongside the broadcast channels.
And in the aftermath of the FCC’s adopting of strong Net Neutrality protections came rumblings that HBO, Showtime, and Sony might seek classification as “managed” services rather than regular broadband Internet content. This would skirt Net Neutrality and allow those content providers to get faster, better delivery to customers apart from the “public” Internet, so to speak.
In short, the times they are a changin’, and not in cable’s favor. To get a better grasp of just how dramatic all of this news is, and how much it’s changing the landscape of the future of content distribution and consumption, I spoke with Deloitte, who work on — among other things — strategic risk management and who provided data and insights regarding the emerging threats to traditional business models in entertainment, and how the landscape is going to change in the future.
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First, some generalizations: What is the trend with regard to cable versus alternate viewing mediums like DVRing, Netflix, and so on? Deloitte notes that households have an average of seven connected devices, and that number will grow over time. The company’s Digital Democracy Survey revealed a great deal of relevant data. For example, 37% of U.S. consumers today own the trio of tablets, laptops, and smartphones, a percentage that represents a 270% increase since 2010. In the same time frame, women have gone from just about 11% of those trio-owners to 45% of those owning all three devices. And a major factor in trends is generational differences, which aren’t always obvious when you look at the broad data but which significantly change consumption patterns from one generation to the next.
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