Tuesday, November 3, 2015

Streaming Wars

TV executives see cord-cutters as a strange, exotic species that must be observed and scrutinized. I learned this while seated between several high-ranking executives from the country’s largest broadcast and cable companies one evening this summer.

Once I outed myself as a cord-cutter (actually worse, a cord-never!), my purchase decisions became the dominant topic of conversation. I may as well have said I hunt zombies in my spare time. They bombarded me with questions.

What do I watch? How do I watch? I must not like sports, they correctly noted. What do I subscribe to? Hulu and Netflix?! And HBO Now? And Spotify? And Amazon AMZN -0.48% Prime Video?! Don’t I know that the price of all those subscriptions add up to much more than a basic cable package? Didn’t I know how irrational I was?

It was maddening to them, and I understand why. But consumers, myself included, can be irrational. Just ask JCPenny, which in 2013 stopped inflating prices for the charade of coupons and deep discounts, and nearly tanked its business in the process. Turns out customers preferred the charade.

Likewise, it’s increasingly common for cord-cutters like myself to cobble together an array of separate on-demand subscription services in lieu of a traditional cable subscription. Media companies, including 21st Century Fox, Viacom, CBS, Time Warner, Discovery, and Walt Disney, forecasted decreases in cable subscriptions this summer, and their stock prices were hammered as a result.

While TV execs criticize cord-cutters for irrational purchase decisions, the digital streaming services are in an all-out war for their money. The competition means more and better choices, making a basic cable package less attractive by the day.

by Erin Griffith, Fortune |  Read more:
Image: Beck Diefenbach — Reuters