Once again, media watchers fail to connect the dots. In this case, the tectonic shifts underlying TV are missed while the details fill the discussion:
The Sofa Wars - Plenty to Watch Online, but Viewers Prefer to Pay for Cable
A New York Times/CBS News poll this month found that 88 percent of respondents paid for traditional TV service. Just 15 percent of those subscribers had considered replacing it with Internet video services like Hulu and YouTube.
Younger people, though, are more intrigued by the possibility: respondents under the age of 45 were significantly more likely than older ones to say they had considered replacing their pay TV service. The poll was conducted Aug. 3-5 with 847 respondents and has a margin of sampling error of plus or minus three percentage points.
Even through the downturn, the number of people subscribing to pay TV continued to grow. Cable, satellite and fiber-optic providers added 677,000 customers in the first quarter of this year, according to the investment firm Sanford C. Bernstein.
The firm’s preliminary numbers for the second quarter, which is traditionally weak, show a slight drop in subscribers. Satellite providers and Verizon’s FiOS service have been stealing market share from cable.
The cable and satellite companies say that their customers are reluctant to pay more — the Comcast chief executive, Brian L. Roberts, described customers who paid only for video, without a bundle of other services, as “very price-sensitive” — but insist that cord-cutting has not been an especially disruptive trend.
To keep customers, especially the price-sensitive ones, the carriers are getting creative. They are trying to bring the living-room experience to every other screen in a customer’s home, including laptops and tablets. Last week Verizon became the latest carrier to announce plans for an app that puts live TV on the iPad, pushing out the walls of cable TV’s walled garden a bit.
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lenty of people say they have foresworn cable for good. They are largely young adults who know their way around the Internet and have grown accustomed to watching video on computers and other devices.
The Times/CBS News survey found that people under the age of 45 were about four times as likely as those 45 and over to say Internet video services could effectively replace cable.
All the kvetching about whether a specific show is available on the pioneering tools today completely misses the point. The reason that the TV experience is going to move to the web is that the web is social: people want to discuss the football game with friends, share movies, and vote on who is the best dancer. And the younger folks more than older ones.
The race to provide the best social TV experience is on, and although Apple hasn’t really rolled out any strategically important social tools yet, I bet that their next generation iTunes in the cloud — based on the huge server farm called ‘The Orchard’ — will start to incorporate social features, along with an industry-changing capability to live stream recorded, and not too far down the pike, live TV.
This will be as transformative to TV as the iPod and iTunes were to the music business.
The natural unit for music is a song, not albums, as iTunes proved.
The natural unit of TV is the show, not a series, not a channel, and not a bundle of TV channels. This is what the networks and the cable companies are about to find out.
And the experience will be social, which is how people watch TV: talking, yelling at the screen, texting their friends about the last play, voting. The cable and network businesses have completely missed that revolution. Look to Apple to blow that open.
