The Cord Cutter’s Dilemma: Why So Few People Actually Take the Step
Every few months a new study comes out showing that a sizable percentage of pay-TV subscribers are fed up with their service. They feel like they are paying too much money for too many channels they never watch, on a system that feels like it hasn’t been updated since 1997. (Or, to put it another way, they feel like they are paying Nordstrom prices for a system that’s giving them Kmart service.)
Despite these studies, cord-cutting remains rare: Q4 2016 stats show that less than 1% of all pay-TV subscribers are pulling out. Why is that? There are a number of factors that prevent viewers from cutting the cord:
1. The Cost Savings Aren’t There: Too often, a potential cord cutter starts to add up what they’ll be paying and realizes they won’t really be saving much money. To begin with, there’s the cost of broadband. While there are many smaller companies who can provide broadband, switching can be a hassle. And the company the viewer already has broadband through — usually their current pay-TV provider — likely has them locked into a double- or triple-pay package. Eliminate that bundle, and the price of broadband shoots up. Then there’s what to watch: adding on a skinny bundle sounds like a good way to save money. But for a family, especially with younger children, the add-ons can quickly add up. Throw in some SVOD services like Netflix, HBO Nowand Hulu, and too many viewers find they would be saving a few dollars on their bill while eliminating a good percentage of the content they have access to. That’s why they’re taking a pass.
2. It’s Far Too Confusing: Grid-based pay-TV guides may not be elegant, but they are fairly easy to figure out and they provide a simple way to stay on top of all the programming that’s available. But cut the cord, and that guide goes away. What you’re left with instead is a series of unconnected apps and no real way to organize them. The guides on Roku and Apple TV are a start, but until the apps start giving device manufacturers deeper access, that’s just what they’ll remain: a start. Without some sort of overarching platform, the cord-cutting world can seem confusing and frustrating, especially to users who are not overly tech-savvy.
3. Live Linear Is an Issue: Say you want to watch the 6:00 news on your local NBC affiliate. Or maybe you’re a big fan of black-ish and want to be able to watch each new episode when it first airs. If you’re in one of the major cities where networks have “O&Os” (owned and operated stations) then you’re okay. But that’s only about one-third of the country. In the rest of the U.S., local networks are not available via the new online-only services. Viewers are only able to watch those programs on demand. That makes cutting the cord a whole lot less convenient. One way around this is to get an antenna — either indoor or outdoor will do — and use that to get HD access to the broadcast networks. But that raises its own set of issues: there’s no DVR with over-the-air broadcasts, so there’s no way to pause the show you’re watching or record it if you can’t watch live. That too makes cord-cutting a real hassle.
Fortunately, others have noticed these issues, and so the industry is finally beginning to respond.
Companies like Freecast are looking to solve the lack-of-an-overarching-guide issue. Their SelectTV guide offers a sleek interface for cord-cutters that combines over-the-air and apps along with an array of movies and TV shows that are available online for free. That’s a real differentiator for the $2.99/month service, as we’re not aware of anyone else who is cataloguing the thousands of hours of free content that is available online. These are network TV shows and well-known studio movies, too, not the usual “free” content no one has ever heard of. Combining this with free over-the-air broadcasts is also a great answer to the “how do I save money?” question, as the two together are both completely free and provide a variety of choices, both VOD and linear. It’s not a great solution for sports fans who want to see every game, but if “free” is your number one concern, it will definitely work for you.
Another option is TiVo, whose Roamio OTA serves as a DVR for over-the-air broadcasts and combines those over-the-air television broadcasts with OTT apps to create a sleek looking program guide that also provides the full TiVo user experience. This is a great option for people who plan to get most of their content from apps, with some supplementation from their antennas. The only downside here is the cost of the box — $399 plus tax, which is the equivalent of three or four months worth of cable bills.
We wouldn’t count device manufacturers out either. Roku, AppleTV and AmazonFire have all been investing in the quality of their interfaces, trying to create an all-encompassing voice-controlled guide that allows users to easily sort through the range of app-based programming on the device. It’s easy enough to see the device manufacturers throwing in the ability to receive over-the-air broadcasts as a way to entice customers who want those live linear feeds too. It doesn’t solve the price issue for families, but for anyone who is looking to cut down to free over-the-air, plus one or two subscription services, it could prove to be just the ticket.
It will be a while before we see just how big a movement cord cutting will become or if the nation’s pay-TV providers finally come through with the sorts of innovations that create experiences that justify their high prices. In the interim, however, we should see many more products aimed at helping to make cord cutting a more user-friendly experience.
Originally published at Broadcasting Cable on April 13, 2017