Cord Cutters May Not Be a Threat, But We Should Watch Cord Nevers

  • According to Time Warner CEO Jeff Bewkes, cord-cutting is exaggerated, and very few people other than low income Americans are actually giving up their cable subscriptions for digital services.
  • Despite their growing popularity, Netflix, Amazon and other streaming services are not threatening the TV industry, Bewkes says. They “are largely distribution platforms that don’t own the quality content audiences want to watch,” notes paidContent. “[Bewkes] added that such platforms compete with each other and not with traditional TV companies.”
  • “Despite his dismissal of cord-cutting, Bewkes did acknowledge the emergence of ‘cord nevers,’ which are younger people who never acquire cable in the first place,” the article continues. “For them, he said it’s not a question of money — ‘they can afford three Starbucks a day’ — but rather different habits and expectations. Bewkes pointed out that the ‘cord nevers’ are not receiving the best content (it will be interesting to see if this argument one day sways them into signing up).”
  • Bewkes touched on advertising, suggesting ad-only models are not viable for most content, and companies need to create ads that people want to watch.
  • The cable industry also has some problems that need to be addressed, such as the rising cost of sports. “Half of the population that doesn’t want sports is subsidizing the other half that does,” Bewkes says, noting that consumers are forced to buy expensive sports channels they might not want as a part of their cable package.
  • “All of this suggests that the cable industry will finally have to give in and offer consumers a full-blown a la carte model — but don’t hold your breath,” the article states. “The simple reality is these rich and powerful companies are going to ensure that a cable subscription remains a toll to get access to things like HBO and the NFL on the iPad.”

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