Cord Cutting Denial Is Alive And Well

from the head-buried-firmly-in-the-sand dept

You might recall that former Sanford Bernstein analyst Craig Moffett made a bit of a career by mocking cord cutters as poor, irrelevant basement dwellers, when he wasn't denying their existence entirely. Now at his own firm, Moffett has taken a complete 180 in recent years, unable to deny that cord cutting is a very real phenomenon that's only growing as the pay TV industry refuses to offer more flexible pricing options. And, contrary to Moffett's original analysis, most data shows that cord cutters tend to be young, gainfully employed, and well educated.

No worries though -- someone at Sanford Bernstein appears to have picked up the cord cutting denial mantle. Bernstein research analyst Todd Juenger this week has been making headlines for a research note that not only claims all of the new cord cutting options arriving in 2015 will fail (whether it's Sony's Playstation Vue, SlingTV or looming services from Apple and Verizon), but that cord cutting quite simply isn't happening. To prove it, he cites a non-specific "body of evidence" that he claims proves few people really want these services:
"A strong body of evidence is emerging that suggests to us that none of these services are likely to gain much traction," he said. "Simply put, for existing pay-TV subscribers, the content is too limited (relative to the cost savings); and for cord-nevers, the price is too high (relative to the appeal of the content)."
There's a bit of an ongoing media narrative afoot that new streaming options just aren't any good because users have to subscribe to every one of them just to get the same volume of content they get from traditional cable. But these narratives usually ignore the fact that users want something notably different from traditional cable. They also ignore piracy entirely in their analysis for whatever reason, which seems absurd when you're trying to take a bird's eye view of where the TV market sits.

Still, Juenger proceeds to insist that meaningful cord cutting "isn't likely to happen," and so the cable TV industry should do its very best to protect the "status quo":
"Cord-cutting, in large numbers, isn't likely to happen," Juenger said. "It's one of those ideas that sounds great in the abstract but crumbles when faced with the reality. OTT services seem poised to garner few subscribers, which is more good news than bad. We believe it's better for the pay-TV ecosystem to remain in the status quo than to add millions of OTT subscribers at the cost of blowing the whole system apart."
One, cord cutting is already happening in meaningful volume. Craig Moffett, the guy that used to deny cord cutting like Juenger, recently noted that he believes the pay TV sector lost 1.4 million total subscribers last year, largely thanks to cord cutters or "cord nevers." Two, most of the news outlets reporting on Juenger's comments didn't mention the fact that the "focus group" his statements were based on consisted of a whopping 18 people, nowhere near enough to actually make the kind of pronouncements he's making (he cautions people from making too much of the findings for this reason -- right before he himself apparently makes too much of the findings).

It's not clear why Bernstein analysts always seem intent on being at the forefront of cord cutting denial -- you'd hate to think they're trying to somehow influence stock holdings or performance by intentionally giving bad advice. But cord cutting is very much real, it's very much growing, and there's finally a flood of over-the-top streaming options arriving later this year now that broadcasters have started easing up on licensing restrictions. Advising the industry to hold tight to the "status quo" in the face of Internet video in 2015 is akin to telling residents in the path of a tsunami to stop worrying and have a cocktail.
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Filed Under: cable, cord cutting, craig moffett, denial, todd juenger, tv
Companies: sanford bernstein


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  1. identicon
    Bryan Naylor, 8 Jun 2015 @ 4:28am

    Re: Cord-Never Kids

    I couldn't agree with Kevin's comment more... We opted to cut the cable 3 years ago and over time have leveraged a few different streaming options. We've now moved over to leveraging an Android based streaming player to get the content we need... all free.

    One of the options available on the streaming player we use, is an add-on that does offer "live streaming" of programming from major networks.

    I was channel surfing the options with my 10 year old beside me and we decided to watch an episode of Two and a Half Men.

    When the episode started, he wanted me to rewind it pack to the beginning so we could watch. When he found out we couldn't his immediate reaction was "this really sucks"... "It's like living back with the dinosaurs".

    Children especially are growing up in a time when "On Demand" viewing content is available from a huge variety of different sources. Cable TV has seen it's time... Even the Cable companies are rapidly starting to realize this and are offering the content to subscribers streamed at radically reduced pricing.

    Our kids, won't ever go back to a Cable Service, now that they've been exposed to On Demand Streaming and I can't help but think that Kevin and our children are all that unique...

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