Americans households are canceling their cable service at record numbers. If this trend continues, Cable will be a thing of the past. The cost of providing the infrastructure will be too high relative to the number of people paying to keep it operating.
Now that we have entered a new decade, it just occurred to me that I have lived in my house for 10 years which also means I have gone a full decade without Cable TV at my house. Let’s explore some of the reasons why I cut the cord and why I suspect others already have and are considering it.
We live in a time where there are many alternatives to the cable through video-on-demand services. Netflix, Hulu, and Disney Plus have all seen booming subscriber volumes while traditional Cable TV has been gutted. On a Netflix subscription, there are thousands of options that can overwhelm viewers. It could take them years to binge-watch all the content.
Netflix viewers are overwhelmingly watching reruns of shows. They are interested in older shows like Friends and The Office. This tells me that there is a real disconnect between what viewers want to watch and the content that traditional media companies are creating today.
Paying to be Advertised to
One of the things I detest about Cable TV is the fact that there are so many commercials. A typical 30 minute TV show has 7 minutes of commercials. That means you are watching commercials 23% of the time. That’s a lot.
To me, these two items are mutually exclusive. I refuse to pay money to be advertised to. If I’m going to pay a monthly fee for TV, then I expect it to be commercial-free. On the other hand, if I am going to watch commercials then I expect the content to be free. Either way, I refuse to pay money to be advertised to.
Another problem I have with Cable TV is the structure of the costs. Old media companies have gotten away with tiering all of their channels in bundles regardless if people use them.
I don’t watch Women’s Entertainment TV. ESPN charges $7.21 per subscriber per month and another $0.90 for ESPN2. If someone does not watch sports, that is a lot of money to waste. That is a great revenue stream if you are a Disney stock investor, but if you are a consumer not so much.
Has my experience of not having Cable TV for 10 years been flawless? No, there have been times where I absolutely wish that I had Cable TV.
One of the main benefits of Cable TV is that you don’t need to spend any effort putting on programming. You can come home from work after a busy day, pick up the remote, and just throw something on the tube. Compared to searching through hundreds of programs on Netflix and deciding what to watch, you don’t have to spend much effort or time.
The problem with this is you are watching something you inevitably don’t really want to watch. Even if a show you enjoy happens to be playing, then you are still bombarded with commercials. It is also not likely to be the beginning of a show: more than likely you are watching something halfway through. That doesn’t sound like a good value proposition to me.
The other thing that cable has going for it is that it is one of the few ways to watch live sports. Many leagues have multi-billion dollar contracts with TV networks and thus do not want their content being distributed. This is slowly changing, though. As more people cut the cord the leagues will need to adapt their business models or else risk losing their customer base.
Cable TV subscriptions are loaded up with additional fees. There are often FCC fees, local and state taxes, subscriber surcharges, equipment rental fees, etc. The whole thing can easily add 10-20% to the monthly bill. The average American family is paying a cable bill of $107 a month which is mindblowing. The bills are loaded up with fees and taxes such as Broadcast TV Fee, Regional Sports Fee, Regulatory Cost Recovery, Franchise Costs, Federal Excise Tax, and Sales tax. By the time it is all added up, the bill is extremely inflated.
Platforms that allow video on demand will replace Cable TV 100% except for live sports and events. Cable companies will slowly turn into ISPs(Internet Service Providers). Consumers will continue to “cut the cord” at rapid rates and turn to video on demand. These services already do a much better job of providing the content to consumers when they want to watch it as well as solve the exorbitant cost structure of Cable TV bundled channels.