The Cord-Cutting Revolution Is Nigh

August 26, 2013

cutting the cordIt’s going to happen. Most likely sooner rather than later.

In the not too distant future, you’ll be able to pay for your cable channels a-la-carte, choosing only the ones that you actually want to watch.

Cable companies such as Charter and Time Warner, certainly don’t want this to happen, nor does DirecTV or Dish for that matter, but unfortunately the force of consumer demand and technology will eventually wrench control from giant media conglomerates.

And it will be glorious.

This inevitability was reinforced by two things for me in the past few weeks. First was the report of ESPN “exploring” their options to offer their suite of channels and programming a-la-carte for one low monthly fee, similar to Netflix.

And who better than the juggernaut that is the current sports kingmaker? Not only do they currently command more per subscriber from cable and satellite providers than any other network, $5.40 for just the flagship channel ESPN, but they are also so powerful that they can dictate the scheduling of college football games.

espn-sportscenterThe caveat? Reports say that in order to pay for just ESPN on its own, it may cost upwards of $30 per month.

Many people pay that for their entire cable bill. However, this isn’t a replacement to cable per se, at least not in the next few years, but it is meant to reach those people who have already cut the cord, people who subscribe only to Netflix and might even stream sports illegally.

And there are more of those people than you might think. In the second quarter of 2013, Time Warner shed 191,000 customers and DirecTV shed 84,000, only the second quarterly decline in its subscriber base in its history. Yet, average revenue per household (ARPU) was up 1.2 percent and 4.6 percent respectively.

What this means, and what will continue to be the trend, is that TV channels are charging more and more per user and satellite/cable companies are passing that cost onto subscribers. They are also creating more TV channels, so they can charge more.

Look at the proliferation of conference specific college sports channels like the Big Ten Network and the SEC Network. Or, Fox launching its own sports network, Fox Sports 1, to rival ESPN’s dominance. Recently, FX even split into two channels; FX for dramas and FXX for animation and comedy. And yes, you’ll be paying more for the two than you would for plain old, singular FX.

This brings me to the second instance in the past week that made me believe that the cord cutting revolution was nigh — I got DirecTV. I had been without cable TV for going on five years and without a TV for a solid two, so to say I was excited was an understatement.

Also, as a soccer fan (Come On You Gunners!), the prospect of having every single Premier league game at my finger tips was salivatory. However, in order to get NBC Sports and thus, all the Premier League games, I had to step up to the mid tier package with 285+ channels. AND that didn’t even include GolTV And BeIN Sports which carry the other European soccer leagues like the Bundesliga, La Liga, and Serie A. For that, I had to pay even MORE. But I relented and got it all. Like a sucker.

After it was installed, I realized what my desire to watch soccer really got me: 200+ channels that I will never, ever watch. To name a few:

  • AXS
  • Centric
  • The Esquire Channel
  • Enlace
  • GalaVision
  • GEM
  • Hope
  • JLTV (Jewish Life TV)
  • Link
  • Pursuit
  • RFD
  • Cloo

And so on. Channels I had never heard of, with programming I don’t care about. In the second year of my contract, my monthly fee will go up to north of $85 per month and I will gladly pay it because I want to watch every Arsenal match.

So now I ask myself, is $30 for ESPN really that crazy? When cable and satellite is little more than hundreds of channels that are forced down our throats that we will never watch? I would gladly pay $60 per month for access to soccer, ESPN, AMC, and HBO on any device I want. I’d even happily pay $350 per season to for NFL Sunday Ticket a-la-carte. And my guess is that I’m not alone.

While cable companies have traditionally had enough power to keep this from happening due to infrastructure costs and government endorsed local monopolies, the internet tears down these walls. Companies such as Google, Apple, and Sony are throwing their hat into the TV game, making it easy for anyone to access content where ever they please. Google’s recent ChromeCast makes any TV with an HDMI connection an internet enabled SmarTV and Apple is (supposedly, ad infinitum) gearing up to launch their own TV service.

Companies such as HBO, ESPN, AMC, and other giant content providers will have no choice but to make their content available without strings in order to access a potential consumer base of tens of millions of cordless, non-TV subscribers.

It will happen. It is happening. And I’ll be first in line to toss money at them.