Cutting the Cord

The lamest thing about NBC’s Olympics is not the insipid announcing or the constant shuffling of events or the focus on drama instead of sport. No, the lamest thing is their online streaming.

No, scratch that. The streaming is actually very good. It’s easy to find events, the video is smooth and you can do a picture-in-picture thing to effectively watch two events at once. Even better: you can actually watch the events instead of puff pieces about the athletes, if you can imagine.

No, what’s lame is the business model. Streaming is only available to cable subscribers. You have to be subscribed to NBC, CNBC and MSNBC in order to stream events live to your computer. This may sound fine to NBC and its paleozoic business outlook. But it’s death for the modern viewer.

And it’s death to their finances. NBC is throwing away potentially millions, maybe hundreds of millions of dollars by not making their streaming more accessible. Prime time viewing will draw lots of eyes for a long time — their ratings have been through the roof. But streaming brings in new customers who would prefer a cleaner more current version of their coverage. And NBC could make trainloads of money off of it. I would personally pay at least $50 for unlimited access to Olympic coverage if I weren’t already paying the cable company for it. Just a million customers would bring in a cool $50 million for NBC of which the cable companies would get zero.

(Update: I’d forgotten that Comcast owns NBC and is therefore able to use the Olympics to sell crappy cable packages. That, of course, doesn’t apply to customers of other cable companies or customers who have cut the cord to cable. And the less said of the sleazy Comcast-NBC acquisition, the better. My general point remains unchanged: Olympic streaming should produce piles of money, not aggravation.)

But it’s bigger than that. The current trend is of customers following content rather than providers. Forget what NBC would make now; they would be setting up a gold mine for the future. You wouldn’t have to juggle six channels and tape delays to find what you want. Go to NBC, pony up some cash and the entire Olympiad would be laid out for you. Instead of this, they have hitched their wagon to the dying cable model. (See update above for why they’ve done this).

It’s not exactly news that cable is dying. My personal journey away from cable is like that of ten million other people in this country. When we lived in Texas, we had an elaborate and expensive cable package. When we moved to Pennsylvania, we ditched it. This wasn’t because we didn’t want it but because we simply couldn’t afford it until we sold our Texas home and my wife had a job. But even once those things were cleared up, we didn’t go back. We realized that we hadn’t missed cable. Between Netflix, Amazon and online streaming, we pretty much had everything we wanted. I’ve recently upped the subscription slightly to get Olympic coverage and football games. We’ve also had grandparents moving in with us for long periods and they miss the TV. But if I could, I would cut the cord completely.

The Great Recession has only accelerated this trend. People need to save money and cable is an obvious place. But even when (if?) the recession ends, I don’t think they’re going to stampede back. Consider the following replacement we put in place for a cable subscription running $100 a month:

  • The main thing we watch broadcast TV for is Doctor Who. For $2 an episode, we get it on Amazon or Itunes within 24 hours. And we own the digital copy. Total cost: $28.
  • We also like The Daily Show and the occasional sitcom. Hulu and Comedy Central’s website fill that gap for the cost of watching a few ads.
  • Most other stuff we get from Netflix streaming or DVDs. Total cost: $240 a year.
  • I recently subscribed to MLB.tv. I now have access to any baseball game that is not blacked out in my area. I’ve been watching my Braves all season; I watched the end of Matt Cain’s perfect game; I watched Bryce Harper’s debut. This is better than cable; way better. Total cost: $125.
  • If the NFL and NCAA had similar packages, I would buy them. NFL has Sunday Ticket, but it is only available to either Direct TV subscribers or those who can’t physically get Direct TV because of line-of-sight issues. It also costs $350, which is ridiculous. Let’s assume they come to their senses once the Direct TV contract runs out and offer it to everyone at a reasonable price. Let’s assume the NCAA does so as well and the two combine for about $300 in cost.
  • We’re now up to a grand total of about $700. For that price, I get to watch any network television I want, when I want. I get to watch any baseball game in the country (and any football game if the NFL/NCAA ever pull their heads out of their asses). I get to make sure my daughter watches decent TV like My Little Pony instead of horrid TV. And cutting off her TV is as simple as changing the router password. And I still have $500 left over to buy any DVDs, blu-rays or downloads that haven’t been covered already. Or I can just throw myself a big party with some very expensive scotch.

    Jesus Christ … why is anyone staying with cable? If channel surfing really that much fun?

    I’m not going to say that cable is dead … yet. Cable can be very much alive if they start competing with that model. They’re doing this in their own way with On Demand movies and sports packages. But they have not gotten within screaming distance of the convenience, cost and mobility offered by other services. I can stream Netflix and MLB to any device no matter where I am in the United States; I can barely watch Comcast in my living room. I can watch Netflix or Amazon through an iPad app; for Comcast I need a huge box next to the TV. I can cut Netflix off with an e-mail; I’m locked in to Comcast for months. Netflix charges me $20 a month for as many downloads as I want; Comcast turns me over and shakes me by the ankles to see if I have any loose change.

    That may have worked ten years ago. It’s a recipe for extinction now.

    Cable companies are making tons of money right now, so they think everything is fine. But they are ignoring two things: (1) they are making money because they have little monopolies all over the country; (2) they are making money off the expectations of older customers. My daughter’s generation will simply not stand for this. Already, she expects content to show up on any reasonably flat surface at a touch with no commercials. She’s a part of a generation for whom everyone gathering around the Ol’ Radiation King at 8:00 to watch Seinfeld and eight minutes of commercials will sound as quaint as party phone lines do to me. She will navigate through a dozen internet services to find precisely what she wants at the best price and the least fuss. And cable … isn’t that.

    Update: You might wonder what provoked this rant. Up until a few months ago, I had a minimal cable package. I ran the line into the back of my television and got a good number of channels with some in HD. We got PBS for the kid, football in the fall and a handful of other channels for the grandparents. We were fine. Then Comcast decided to “improve” their service. Suddenly, we needed a box and another remote control for every television. And the results was fewer channels and no high definition. It tells you how little we watch TV that we didn’t even notice this for a month.

    So, as result of Comcast’s service improvement, we paid more, got worse service and were blessed with a big white elephant sitting next to every TV in the house. This is not a business model for the 21st century. It’s the business model of someone who has a monopoly … one that is doomed to extinction.

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