[opendtv] Re: TV Technology: Nearly 31 Million Americans Have Never Paid for Traditional TV
- From: "Craig Birkmaier" <dmarc-noreply@xxxxxxxxxxxxx> (Redacted sender "brewmastercraig" for DMARC)
- To: opendtv@xxxxxxxxxxxxx
- Date: Thu, 18 Apr 2019 07:07:24 -0400
On Apr 17, 2019, at 8:36 PM, Manfredi (US), Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:
Strange "self-soothing" logic here.
First off, "traditional" TV, practically by definition, is OTA TV. Since when
has cable TV become "traditional TV"? But okay, let's use that term.
Since more than 90% of U.S> homes stopped watching OTA TV in the last century
Bert.
Or if you prefer, when viable alternatives to OTA TV became available in the
last century, and nearly everyone started paying for their TV entertainment.
Okay, so the group of "cord nevers" is increasing, as are their median
incomes. Does this suggest the issue has anything to do with income levels?
Sounds to me, quite the opposite.
What it suggests is that we have a very large number of young people in the
U.S. that have never paid for TV. Some may still be living at home. Some may
not care about TV as they have games and the Internet to keep them occupied.
And some have been watching these “traditional TV services,” without paying for
them.
"MRI-Simmons reports that about 27% of Cord Nevers-around 8 million-plan to
sign up for a pay-TV service in the next six months. Around 70% say they will
subscribe to a traditional service (cable, fiber optic or satellite), while
the remaining are looking at streaming TV packages, like Hulu with Live TV,
DirecTV Now or Sling TV; among the 18-34 age range, 41% are looking at
streaming options."
What is important in this article is that when these young people start to
settle down and form families, about 70% choose to subscribe to a traditional
multichannel service. ANd most of the rest will sign up for a new streaming
VMVPD service.
Even assuming some of this is true, there's the younger bunch of cord nevers
coming on the scene. Somewhere else we saw that FOTI TV material was a
fast-growing category, so it's not at all clear where a reversal of the cord
nevers trend would be coming from. Besides which, these cord nevers are not
likely to go with what they call "traditional" TV at all, but rather,
perhaps, some OTT form of pay TV.
Just read the story Bert. It is not difficult to understand.
It does not matter whether these former cord nevers are signing up for a
traditional MVPD service, a streaming VMVPD service, or a variety of on demand
services like Netflix. When then “grow up,” start making a decent living, and
buy homes and start families they start paying for TV entertainment.
And to further demonstrate the illogic of this "self-soothing,"
"Young people used to say that as soon as they got their first well-paying
job, they would sign up for the full suite of traditional TV services," said
Karen Ramspacher, senior vice president innovations and insights at
MRI-Simmons. "Today, there are many more options for connecting to TVideo
content-so competition for these subscription dollars is fierce. As they grow
in numbers and wealth, today's Cord Nevers definitely represent an
opportunity for content providers-but understanding the Nevers' underlying
motivations is essential to targeting them effectively."
Exactly. So, ignoring the younger set of cord nevers coming on the scene, it
seems unlikely that those who do begin paying for TV will go for the
1970s-1980s traditional MVPD model. Why would they, once they have
experienced the options and flexibility available from OTT sites? And we know
that more pay OTT sites are on the way, to boot.
Read the article Bert. 70% will go the “traditional route,” while most of the
rest will opt for OTT services. Why?
It’s called bundling Bert. Everyone needs Internet access, and at some point
some kind of TV Entertainment bundle, or bundles. The traditional services
still have an advantage with respect to ISP services; and they are now
competitive in terms of bundles with ISP and TV content. And the traditional
services offer all local broadcast channels, while the new MVPD services may
not have access to all broadcast networks.
Let me personalize this for you Bert. We switched cords to DirecTV Now more
than a year ago. Now that DirecTV Now is moving from a Beta test to a real
service, the price is increasing as they add more channels and features.
THIS SHOULD SOUND FAMILIAR BERT.
It is exactly why cable prices have increased faster than inflation for
decades. I am now paying as much for Internet and TV as I did before.
So guess what? We are going to switch back to Cox for both TV and Internet,
because they are offering bundles that are cheaper than staying with the VMVPD
service.
The article predicts a reversal of a trend, with no justification of any sort.
There was NEVER any justification for the notion that everyone would cut the
cord and switch to OTT services. Competition is driving this transition now,
and the traditional services have plenty of room, and motivation, to compete
with the OTT services.
Regards
Craig
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