Thursday, 24 April 2014

Pay TV is going to be in decline forever (cable cord cutters). But therefore, the future of online video is bright.

They call it 'cord cutting'. 

That's where you stop paying your expensive monthly cable or satellite subscriptions in favour of watching online video. You 'cut the chord'.

In fact it's likely that young adults will never pay for cable in their lives having been brought up online, so the cable future is bleak anyway. And the number of 'cord cutters' is increasing at a dramatic rate year on year.

In turn, as you'll read in another blog here, as subscribers are moving away from cable so too is the cable viewing audience obviously declining (by -11% last year). Less subscribing, less watching and ultimately, less advertising.

Of course too, the highest percentage of cord cutters are those with a Netflix or Hulu account already - as you'd expect - but in recessionary times with so much content online, subscriptions are being cut anyway. At averaging $200 a month, it's no wonder.

Pay TV is going to be in decline forever. And on this side of the world, that means 'Sky'. What they might resort to is monthly caps or limits on access with a more "tiered" approach - practically 'pay-per-view'. If I was them, that's what I would do.

I do understand that there's more revenue in the stability of monthly subscriptions and that's one model. But given the swiftness and steepness of the decline of that model, you have to do something else or be eaten.

Introduce a pay-per-view option to supplement your subs. 

But what it does point to, is the future for growing demand for online video, is bright.