Friday, September 13, 2013

"Young People Can't Afford $100 Cable Bills"

According to Epix CEO Mark Greenberg, cord cutting is nothing new.  Whenever prices get out of whack and competition comes in with cheaper alternatives, consumers tend to choose to change.  He notes that when satellite TV came in to compete with fiber connected cable operators and he sees that today with streaming services.  Others call it cord cutting, Mark calls it competition, and he is right. 

Apple certainly faces the same issue with cheaper smartphones from competitors.  With their latest announcement that their less expensive 5C iPhone was indeed not as cheap as expected, their share price dropped considerably. 

Cable operators with rising license fees and the desire to maintain large profit margins are forced to keep raising the cost of basic cable, driving more and more consumers to seek alternatives.  And Netflix, Redbox Instant, Amazon, and others are there to offer their content at lower monthly costs.  But Mark has some ideas to compete more effectively with these OTT companies and perhaps even winback cord cutters.  "The answer could potentially lie in smaller and smarter bundles, combined with new user interfaces, integration of social networks and better content curation."  He also argues for smaller bundles of networks at lower price points as well as fully embracing the TV Everywhere concept and authenticating content viewing outside the TV box and home. 

For now, it is an acknowledgement that cord cutting is real and that its root cause is price gouging and increased competition.  It is a concept truly not unique to cable but learned across all industries, their products and services.  In cable's case, it just sounds cooler to call it cord cutting. 

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