By: Michael Scher

With the rise in pricing of cable providers, many consumers are taking the plunge into cord-cutting. According to techopedia.com, cord cutting refers to “the process of cutting expensive cable connections in order to change to a low-cost TV channel subscription through over-the-air (OT) free broadcast through antenna or over-the-top (OTT) broadcast over the Internet.” In fact, according to Forrester Research, roughly 24% of all adults don’t pay for TV. Typically, this is an act of defiance by the consumer because of pricing, coercive advertising and inadequate customer service, among other issues. Nowadays, consumers have a plethora of options like never before.
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http://www.latimes.com/business/technology/la-fi-thedownload-cordcutter-20151027-story.html

Depicted above, 8.6 million homes in the U.S. are considered “cord-cutters” and will most likely opt for internet streaming video subscription services. This figure is heavily correlated for millennials and by 2025, cord-cutting is expected to include half of all adults under the age of 32. Quite the alarming statistic as cable was once the sought-after entertainment choice by many.

Obviously, there are many advantages and disadvantages that come along with this, but here are some that come to mind as highlighted below:

Advantages

  • Saves money
  • Avoids subscription to undesired channels
  • Minimal advertising
  • Can watch more accessible content on the go
  • More options for the consumer


Disadvantages

  • Bandwidth issues
  • Lack of/limited live video streaming opportunities
  • Popular programs being inaccessible through other platforms

Another noted benefit is cord-cording puts the consumer in control by selecting the platforms, programs and content they want to watch via a la carte, rather than be forced to buy a bundle package for the channel or programs they want. On the contrary, the a la carte option could be potentially costly depending upon their selection. However, this will also eliminate the process of having hundreds of unnecessary channels being scrolled upon every time you watch television.

While these habits have shifted, how will television studios think differently to help consumers pay attention to ads rather than be coerced? Won’t this affect their impact of advertising? Streaming services such as Netflix forgo advertising with the focus on creating original content to help set them apart from the competition and focus ideally on the consumer. So, where does this leave the rest of the advertisers like Hulu and Amazon who use it for revenue purposes? Also, DVR throws another wrench into the mix as consumers can watch programs on their own pace, on their own time, while fast forwarding commercials.

This is where Programmatic comes into play. “It’s buying specific audiences using lots of data to figure out the right ad, the right person, the right time. It’s the idea that machines will simply handle all of the process involved in buying media—the insertion orders, the paperwork, the trafficking, the spreadsheets,” defined by ADWEEK. Therefore, it will deliver more informed decisions within the digital space on which ads should be displayed, will be most likely clicked on and targeted more effectively to deliver the best results. From there, advertisers can evaluate what’s working, and what should be optimized. With this in mind, they are reaching their audiences like never before and are adapting to this new way of consuming media.

In short, cord cutting seems to be the inevitable unless cable companies make stronger programming to compete with these subscription services, eliminate the automation from their customer service directory and rather incorporate more of a human element where you actually feel like you’re actually getting the help you deserve. In addition, from transaction fees, supplementary charges to overall monthly costs, it’s not even worth the money to spend for cable especially when you can watch these programs all online. I guess time will only tell how these cable companies will not only transition, but to continue to work with these streaming providers to ensure at the very least, that their content is still being viewed by someone.

I would love to hear your input on this topic and as always, if you like what you read, be social and share. Feel free to follow me at @michaelscher27 @IndraPRGroup