Big Cable Now Markets "Cord Cutter" & "Cord Never" Packages - A Watershed Moment

Remember those days when major cable companies rejected OTT video streaming services and the prospect of "un-bundling" pay TV packages?  Yes, those days were so long ago ... except they weren't.  "Those days" -- in fact -- were much less than one (1) year ago!  That bygone "traditional cable company full bundle" era began to really unravel last September (only about 7 months back) when several major media companies, including HBO, announced their stand-alone OTT and "unbundling" ambitions in rapid succession.  I called this the "Great Unbundling of 2014" -- and it only accelerated since then.  The floodgates opened ...

... and now this -- just last week Cablevision not only accepted this OTT/unbundling new world order, it openly embraced it.  In a remarkable turn of events, Cablevision CEO Kristin Dolan announced new stripped down, affordable OTT programming packages targeting both "cord cutters" and "cord nevers" (yes, she used those terms -- as did the official Cablevision press release).  With that one announcement, Cablevision acknowledged -- on behalf of the entire cable/satellite television world -- that the times have changed ... and will never be the same again.  Make no mistake, Cablevision's announcement is a watershed event -- absolutely, positively, full stop.  Just think about how much has changed in such an incredibly short period of time.  THAT's what this represents.

And, amidst Cablevision's "cord cutter"/"cord never" announcement, its press release left a subtle -- yet hugely important -- strategic clue about how the company (and other major cable companies) now think of themselves amidst this reality.  Specifically, Cablevision defined itself -- its words -- as being "a connectivity company."  Not a content/programming services company -- rather, a "connectivity company."

Why is this important?  Because it represents an open acknowledgment that Cablevision recognizes that its future (and present) business model is broadband-focused -- rather than content-focused.  And, that's not all bad -- in fact, it can be quite good/smart -- because broadband services generate significantly higher margins than content/programming pay TV package services.  In other words, providing the "pipes" in which that content flows can be -- and is -- extremely lucrative, especially when the thirst for ever-broader "pipes" is accelerating in this increasingly video streaming and hungry world.

The times, they are a changin' -- and already have changed -- indeed!

Big Cable & Netflix -- If You Can’t Beat ‘Em, Join ‘Em?

Netflix has been the bane of existence for big cable companies for years now -- an arch-nemesis -- as its over-the-top content service competes directly with (and poaches customers from) their own IPTV content services.  But, now, perhaps seeing what many believe is the proverbial writing on the wall in this long-time OTT v. IPTV cage match -- i.e., OTT service domination -- as big cable companies are reportedly in discussions with Netflix to carry Netflix on their own set-top boxes.

This follows closely on the heels of quite revolutionary comments by Cablevision CEO James Dolan who said that “there could come a day” where the company gets out of offering content services completely due to Netflix and others of its ilk (Amazon Prime, Hulu, Vudu, YouTube, etc. etc. etc.).  In his words, “if you don’t ride the wave” you get “eaten by the wave.”

While these recent reports underscore continuing disruption of traditional business models, they aren’t surprising.  After all, margins are much higher for cable companies in offering broadband services (as compared to offering content services).  And, with the accelerating pace of OTT video adoption, faster and faster pipes are coveted by consumers.