We Are No Where Near Cord Cutting The Right Way. Here’s Why?

The Promised Land

There has been a lot of talk around cord cutting over the past few years. Netflix, Amazon Prime, Hulu, Roku and now Disney, all have been staking their claims and making us believe that cord cutting is indeed imminent and right around the corner.

But, is it?

For a few decades now, majority of our media consumption has been done via our Cable TV Box (CTB). Multiple networks, choice of programs, a schedule to keep up to and all of this with one single remote.

So what were the major problems with the Cable TV Box?

  1. Lump sum subscription i.e. lack of micro-level control
  2. No or very limited Video on Demand (VOD)
  3. Lack of exhaustive library of program Top Level Categories (Movies, TV Shows, Sports, News etc.)
  4. Not always available across all devices

As common sense would dictate, any player trying to ‘replace’ the Cable TV Box should intrinsically be making efforts at solving the problems stated above. So let us look at some of the contenders as they stand today,

  • Netflix – Its origin stems from trying to take the ‘Movie Library’ online. It never intended to replace the Cable TV Box.
  • Amazon Prime Video – Amazon has achieved a fairly wide global reach, and it sells everything from books to bicycle, so why Movies and TV Shows? Because, why not?
  • Hulu – Originated as a competitor to YouTube.
  • Apple TV – After successfully transforming the Music consumption globally, this is Apple’s take on changing the landscape for consumption of other media types. So far, it is still a pipe dream.

And many more such players in the US as well as across the world. But somewhere down the line as the competition heated up, almost all of these players now have their ‘Original’ shows, in order to grab the viewers eyeballs and keep them on their network. Yes… Network!

Half Baked Solutions

An erstwhile network primarily undertook two kinds of activities,

  • License content
  • Produce content

and then broadcast.

Netflix, Amazon Prime Video, Hulu and others are doing exactly what the age old networks have always done. License content and produce original content, and then broadcast (now stream). Instead of solving the split-network and split-content issue, these services have turned into ‘Networks’ themselves. And whats worse? They don’t even have all the content types.

Going back to the problems with Cable TV Boxes, lets see which ones are being solved by these new-age networks,

  1. Micro-level subscription; yes they have just one subscription but it is for a Top Level Category only, and which in almost all of these cases is ‘Movies & TV Shows’. Most other Top Level Categories have been neglected, barring Sports to an extent. Limited Solution.
  2. Video on Demand. Solved.
  3. Exhaustive Library – Content is still heavily split across these new age networks, primarily due to licensing issues. Not Solved.
  4. Available across all devices. Solved.

What does this say? Almost all of the new age networks have solved the ‘consumer convenience & access’ aspects of media consumption but they are still struggling fairly badly as far as the ‘content’ itself is concerned. So if I may, the ‘technology’ part of the problem has been resolved, but the ‘business’ part of the problem still remains.

Further, in addition to not resolving all of the issues with Cable TV Boxes, they have added further complexity to the entire content consumption process

  • As noted above, they have catered primarily to one Top Level Category of content only: Movies & TV Shows. There are some focusing on Sports but it is fairly limited. Which means in addition to subscribing to these services, we still need our old Cable TV Boxes if we are interested in other Top Level Categories.
  • They have introduced more complications in the consumption pattern. So earlier we had one single remote for the Cable TV Box. Now each of them needs a streaming device attached to your TV or other similar means of access – like multiple apps on your phone/tablet. And why? Because even while Netflix has ‘almost’ all of the Movies and TV shows, it definitely doesn’t have ‘All’ of them. Neither does Prime Video and nor does Hulu or any of the others. Same is the case with TV Shows and its even worse with Sports.

From one remote for one Cable TV Box, we now have multiple remotes/streaming devices/apps. This is not cord cutting the way it should have been.

The Potential

What we need then, is not more of these disjointed ‘new networks with limited content’, but new networks with segregated (at top level category) but exhaustive content.

Imagine, if Netflix or whichever service one subscribes to, looked like this:

  1. Netflix All You Can Watch: $99.99
  2. Netflix Movies
    • All: $24.99
    • Originals: $4.99
    • Hollywood: $9.99
    • Other English Language: $9.99
    • Foreign Language: $9.99
  3. Netflix TV Shows
    1. All: $24.99
    2. Originals: $4.99
    3. Hollywood Productions: $9.99
    4. Other English Language: $9.99
    5. Foreign Language: $9.99
  4. Netflix & Beyond (Yes, this should happen)

    1. All: $49.99
    2. Amazon Originals: $19.99
    3. Hulu Originals: $19.99
    4. YouTube Originals: $19.99
  5. Netflix Music: $9.99
  6. Netflix Reality TV: $9.99
  7. Netflix News: $9.99
  8. Netflix Sports: $9.99
  9. Netflix Religion: $9.99
  10. Netflix Nature: $9.99
  11. Netflix Kids: $9.99

So in effect, these new age Networks should focus on giving the user ‘Exhaustive‘ content, for selected ‘Top Level Categories‘ through a ‘Single Source‘, available across all ‘Devices‘.

THIS is the way forward for cord cutting, where we are replacing a limiting Cable TV Box with one single service provider that provides us exhaustive content in categories we are interested in, while at the same time giving us greater control on what we want to watch.

Does Netflix need to get into all of these ‘Top Level Categories’ like Movies, TV Shows, Sports, News, Religion, Kids etc. The answer is ‘Not necessary’. It can but it doesn’t have to. Different networks can do it, but whichever ‘Top Level Category’ a network chooses, the content has to be absolutely exhaustive.

For example Netflix can take on ‘Movies and TV Shows’ while ESPN can take ‘Sports’ and Disney can take ‘Kids’. The key here is ‘exhaustive’, they need to have everything that’s there to see in that category – globally!

Think of Apple Music, Google Music, Spotify etc. They have all selected ‘Music’ as their Top Level Category, and their collection is pretty exhaustive including regional content across the world, or at least it is getting there. Same with Netflix on ‘Movies’ though it is starting to show cracks now because of the ‘exclusive licensing’ practice of studios with rival networks.

The Ecosystem, Differentiation & Delivery

Can they do it alone? No. We need other stakeholders to fall in line; especially the content owners. We need to get rid of the ‘exclusive’ license regime that is so prevalent today and both, the new-age networks as well as content owners need to limit this practice. If this is done, then on one hand, content owners will get access to more networks (and the value will add up) and on the other hand, the networks will get access to more exhaustive content. In the end, the audience will benefit.

Now, if multiple networks select the same Top Level Categories, how would they differentiate themselves?

Think news outlets. News published by almost all of them are pretty much the same on a given day; only so many events happen across the world in 24 hours. So why would a person subscribe to one news outlet over the other? Multiple reasons,

  • Editorials (think Original Content)
  • Breaking stories
  • Guest Posts (think Special Programs)
  • Localization (well, think Localization)
  • Relevant advertisements, which will in turn depend upon volume of circulation, hence branding and marketing (think, targeted Content based on viewing habits)
  • Reach, Ease of Use and Presentation
  • Value added services like special weekend editions or classifieds
  • And of course quality of service (4K, 5K, streaming speed etc.)

So there is no dearth of ways to differentiate themselves, and these are just a few ideas. Am sure there are way more brilliant minds out there to figure this one out. This is classic branding and marketing play.

And finally, the delivery.

We cannot have split delivery like we have today – multiple dongles, boxes and remotes. So whoever is planning to be the ‘Box’ in your living room or the ‘App’ on your device – Apple TV, Roku, Amazon, Google.. really don’t care who, should have all of these new-age networks/service providers on it. I don’t see this as much of an issue though since it is fairly prevalent today.

While this may not be the only way, I see this as a clean & simple approach to providing content to users the right way, and in effect, cut the cord.

 

 

 

 

 

 

 

 

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