How Cord-Cutting Has Failed
Despite the best efforts of our millennial generation to “cut the cords” and ditch the costly cable providers services for our smart TV’s and streaming services, we are slowly seeing that nothing really changes. The exact scenario we wanted to avoid is playing out simply under a new disguise, which is allowing it to thrive.
You might think I’m crazy here, but let’s start with a little history lesson for context. Before the era of streaming, television shows and non-theatrical movies were all consumed on our television sets at home. Our access to shows and movies, news and sports were all made available through cable networks and channels, which the consumer would pay for access to. In return they would get a variety of ad-filled content. This want on for years as the only system of content delivery to a consumers home. People eventually got tired of ads and the fact that you pay enormous monthly payments for channels that you don’t even care about. So as new technology came out, and streaming channels became options for specific content, people began “cutting the cord” and using the few available streaming apps for their content. Initially, it saved them money and gave them just the content they wanted, completely ad-free.
Fast forward to today. HBO Max announces the introduction of it’s ad-supported tier of programming. For slightly cheaper than the ad-free version, you can now consume HBO Max content with ads. Now, the HBO Max team says it will be the lightest ad-load of any streamer, but I have my doubts. I simply look at what’s unfolding, and we have simply recreated the cable system we loathed, except it’s now the streaming system. How many streaming services do we pay for now? There is Netflix, Apple TV, Hulu, HBO Max, Paramount+, Amazon Video, Peacock, Disney+, and the list will continue to grow as every content providers pushes their content to streaming. And of course you don’t need all of these different services, but each of them seems to have one or two shows that are “must watch” and hook you in to buying them. There is so much content though on every single one of these platforms that people never even get to consume. We’ve created that exact same environment of paying a massive monthly fee for content that we don’t care about. It’s truly incredible to see it go full cycle. I believe the ads will continue to become more and more prominent as well. It is only a matter of time that it becomes a necessary part of the streamers business model to bring in ad revenue in addition to subscriptions.
In summary, we successfully “cut the cord”, but in doing so we have simply shifted the cable problem of overpaying for content we don’t consume to a wireless one.