Pulling the Cord on Cable TV and Taking Control of the Viewing Experience

The days of pre-packaged content for big subscription fees are over. We're entering a brave new world of media viewing that is at once more personalized and more social.

Recently my family joined Cord Cutters, a name for the brave few who aren't connected to the multi-channel TV programming feeding tube in the United States. Some 100 million Americans (and 85 percent of American households) are cable TV subscribers. Most of the rest simply can't afford the luxury.

Why have we tuned out? Because we're already watching most of the same content through other media. And because most of what's on cable is garbage and bloated with commercials. And because we've had enough of endless channel-surfing with a primitive remote control through all the crap we're actually subsidizing with our subscription fees.

Until 2011, cable subscriptions were always on the rise. But no longer: Over the past two years, subscriptions have dropped along with prime-time ratings. True, the decline is small compared to market size, but two years of consecutive drops suggest a reversal of trend. After the peak of 2011, perhaps 2013 will be seen as the turning point when the industry really changed.  

So how do you join Cord Cutters? Start by joining Netflix, which offers an on-demand Internet media streaming service and a flat rate DVD-by-mail service (starting at $8 per month), then add Hulu, the on-demand streaming video content service (another $8 per month) and then bring in Amazon Prime, which provides an instant streaming service for selected movies.

You'll need a smart TV, Apple TV, Roku, Simple.TV the Boxee app, TiVo or another type of streamer to download the content and you're basic flat-screen TV to watch it. Suddenly, you have an infinite amount of high resolution content without the bundles of channels you'll never use and with minimal ads. You can watch only what you want, when you want and save about $1000 a year in the process. Welcome to the 21st century.

For those who like to wax nostalgic, go ahead and splurge on a high-definition TV antenna for $15 and get dozens of HD-TV channels for free. Real TV junkies can also always download whatever you want using torrent files on the computer and then transmit them directly to your screen through Apple's AirPlay or similar solutions. All of this is available in Israel with a little bit of resourcefulness on your part.

These new technologies have revolutionized the content industry in the past few years. Look no further than how our kids consume video content to understand that a one-size-fits-all programming model is over.

Viewing has become completely flexible, simultaneously individualized (for example, a personalized 13-episode marathon of a favorite series) and more of a social activity (26 million tweets were sent during this year's Super Bowl).

What you view next can come via recommendations and links sent by friends on social media or suggested by algorithms developed to select what you are likely to enjoy based on previous viewing patterns. In short, we can create our own media universe: our preferences, anytime, on any device, for one low price.

Will Apple grab a piece of the pie?

Network channels now feel like dinosaurs. Stubborn dinosaurs at that, struggling to preserve their old, profitable business model while facing the new, savvy TV viewer. To their credit, these dinosaurs grasped the situation better than their colleagues in the music industry, of blessed memory, who in their blindness helped fuel their own destruction. Players in the area of video content, in contrast, are trying to control everything: the content, the distribution platform and the viewing interface which is the gateway to viewers. The result is unrestrained competition and a variety of interesting experiments.

The veteran industry players are trying to transform themselves into businesses along the lines of Netflix and to distribute content in new, popular formats. Netflix itself is striving to become a content producer in order to take control over the entire value chain. The original TV series "House of Cards" (a massive production that cost $100 million) is Netflix's attempt to create some top-quality original programming to position itself as a premium brand.

"The goal is to become HBO faster than HBO can become us," Netflix's director of content recently declared.

Meanwhile, HBO launched an app last year called HBO Go that allows viewers to watch all HBO content on their mobile devices.  At the moment, it's only available to HBO subscribers but the network recently launched a streaming service in Scandinavia almost identical to the one provided by Netflix. Is it an experiment, a declaration of intent or both?

Meanwhile, Google is investing fantastic sums of money to build production studios to create video content that will air on its subsidiary, YouTube. All other serious players, from Facebook to Intel and even AOL are investing a significant amount of time and money trying to grab a piece of the pie.

All of this leads us to a single, solitary conclusion: Whoever eulogizes television is right inasmuch as we are slowly leaving behind many archaic viewing and business models. But television, in the broader sense of video content, will most likely continue to grow as an industry and become the most exciting game in town.

Presently, it seems that everyone is waiting for Godot, or more precisely for Apple, to show the way.  Apple, for its part, is busy with its own troubles, and seems smart to pause for a moment and observe the market before putting the $130 billion in its coffers to work. It appears that the coming year will show us whether Steve Job's genes have survived in Apple's organizational DNA. Can the company reinvent the TV experience in a way that will liberate us from cable companies for eternity or will another player emerge to lead the masses? 

Reuters
REUTERS