Wednesday, September 18, 2013

Our Next Generation Being Raised As Cord Nevers

My daughter has been asking us recently for a Netflix subscription.  Despite having full access to cable, linear, premium channels, and on-demand programming, as well as full use of the DVR, she wants to watch shows on her iPad.  And the shows she wants are shows her friends are watching on Netflix.  She also just downloaded an Amazon rental movie to watch.  My son, on the other hand, prefers watching tons of You Tube videos as well as shows like The Awesomes on Hulu. For them, and countless of other teens, video is streaming and watched on personal devices.  They may be watching still some shows on cable television, but they are increasingly moving away from it.  And when they finally leave the home and start their own households, it will be the broadband connection that matters most to them.

While my kids are not there yet, others are, and cable television is feeling the results of cord cutting.  "The shift in viewing habits is putting pressure on cable, satellite and phone companies by pinching subscriber numbers, which may have a knock-on effect on revenue growth. The impact on the $80 billion pay-TV industry is already being felt, with 2013 on pace to be the first year ever that total U.S. pay-TV subscriptions will decline, falling to 100.8 million from 100.9 million last year, according to researcher IHS."  Younger generations especially will not have the disposable income to buy both cable and broadband access.  They will be forced financially to choose and their preference is a cellular or broadband connection over a fiber line. 

Certainly content companies are recognizing this trend as well.  Although careful not to hurt their current cable revenue stream, they are building windows for streaming access.  And some are going directly to these streaming OTT competitors for exclusive first run airings.  For Netflix, that resulted in their exclusive series, House of Cards, getting multiple Emmy nominations, the first time ever a streaming show was nominated.  As once cable took more Emmy awards from broadcast, so too could streaming shows one day take more Emmy awards from cable.  And as better content goes to streaming so too will more audiences follow.  No longer will the next generation need a cable subscription; they are indeed being raised as future cord nevers.