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SBJ/Aug. 18-24, 2014/Media
Kids’ vacation viewing habits open this TV writer’s eyes
Published August 18, 2014, Page 11
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Every time I write about the threat of cord cutting, media executives tell me not to believe what my eyes are telling me. The execs roll out statistics that show people aren’t cutting the cord nearly as much as reporters are writing about it.
When I wrote about cord cutting three years ago, ESPN’s research analyst Artie Bulgrin predicted that pay-TV’s subscriber losses would ease as the economy improved. That appears to be true. In a recent research note written after second-quarter earnings for cable and satellite companies, MoffettNathanson Research analyst Craig Moffett wrote, “Cord cutting trends in [the second quarter] remained surprisingly benign. Over the past year, the number of pay-TV subscriptions in the U.S. has barely budged.”
So, subscriber losses have leveled despite the availability of more content online and the launch of free over-the-top networks. But I see a different story. I just spent 10 days on a family vacation — yes, I survived! — and was mystified by how my kids and their cousins “watched” TV.
My three children and their four cousins — seven kids ranging from 9 to 20 — almost never hooked into the Comcast and DirecTV systems in the houses that we rented in Northern California. Instead, they stayed connected with their iPhones. They watched sports highlights with ESPN’s SportsCenter and MLB’s At Bat apps. They used social media, preferring Instagram and Snapchat over other apps, like Facebook, that their parents use. And they played with a number of other apps, with the addictive 2048 being the most popular one of the week.
When they did turn on the TV, it wasn’t for traditional programming — but instead to watch movies on DVD.
The arguments that I used to have with my parents decades ago about watching TV on vacation didn’t happen. The arguments I used to have with my kids just a couple of years ago didn’t happen. They didn’t feel the need to watch traditional television, and those arguments seemed like a quaint reminder of the good old days.
The cable industry’s TV Everywhere push is designed to address the habits of these kids: the ones who don’t care if they are tethered to a cable wire. But my kids and their cousins weren’t connecting to TV Everywhere-style programming. Traditional cable TV brands mean little to them. Rather, they were satisfied with the free content widely available to them on their handhelds.
Media executives have heard this story about teenage viewing habits before. Even in background conversations they say they aren’t concerned — at least not yet.
Right now, cord cutting is being driven by the heads of households: people older than 30 who grew up watching television. As Moffett’s research shows, these people are keeping their cable and satellite subscriptions. My kids are fine watching Orioles highlights rather than the whole game, but they aren’t going to pay for television for at least another decade at the earliest.
One media executive accused me of taking far too big a leap by suggesting that the media habits of teenagers will remain constant a decade from now as they start making their own purchasing decisions. TV executives will still feel confident even as these teens age. If consumers switch the way they watch TV, networks will switch their business models to account for any change. You’d see even fewer sporting events on broadcast TV if cord cutting takes off in any meaningful way because they’d move them all to cable.
I’ve been writing about the threat of cord cutting for more than five years now. Today’s consumers are much more technologically savvy, but cutting the cord has remained difficult. That’s partly a result of network and league decisions to limit the amount of content available for free — either on TV or on digital.
Rather than “cord cutters,” media executives say they’ve seen more instances of “cord shavers.” Those are people who pare their subscriptions down to the lowest-cost alternative. But even that fear is belied by cable operators’ quarterly earnings. Moffett found that the “pay TV industry is growing revenue more than twice as fast as the wireless industry.”
Moffett said he’s still concerned that the price of video, combined with the availability of online content, will hurt the pay TV industry. “The risks to the system are now higher … even though the current evidence suggests that trends remain benign,” he wrote.
Maybe the current evidence is benign, but I still trust my own eyes. The behavior of the kids I vacationed with shows that they are developing viewing habits that ensure that the way networks deliver video will change significantly over the next decade. n