1. Cord Cutting On The Rise, Now At Whopping 0.8% of Pay-TV Subscribers
When it comes to cord cutting and the whole “Death of TV” meme Silicon Valley insists on foisting on us, context is everything. We keep saying this and hopefully someone is listening.
Yes, the number of total cord cutters is up this year. You want a headline? The number is almost double what it was last year! Almost 800K households cut the cord! Take that TV Industrial Complex!
You see the cold harsh reality is that those 797K households out of 93.6M who gave up pay-TV equals less than 1% of all pay-TV subscribers. 0.8% to be exact. That’s called a “rounding error” in most other businesses.
Yes, pay-TV services could do better. Yes, a recent study showed that 20% of users are not happy with them. And yes, that’s mostly their own doing. But a trend? A movement?
Surely you jest.
Why It Matters
While lots of pay-TV companies lost subscribers (Charter because of merger issues, Dish, because of constant carriage deal feuds), one company actually gained subscribers: Comcast. Now their gains weren’t huge—only 161K new subs, but for a company whose name had become synonymous with everything that was wrong with the pay-TV industry, it was huge.
And the reason Comcast is winning is fairly obvious: innovation. They are far ahead of their competitors on a number of fronts. Their X1 set top box has an interface that is attractive, user friendly and functional. They have full Netflix integration into the X1 box. And they just rolled out an advanced TV Everywhere app. That’s the sort of innovation their competitors are not doing and it’s why they are hurting. Beyond “it’s difficult for large companies to innovate” we’re truly at a loss as to why other MVPDs are not following suit.
The other growth area for pay-TV was V-MVPDs, the online-only services from Direct TV/AT&T and Dish, which added 845K subscribers. Here again, innovation is at play as these services give subscribers the TVE-like functionality they’ve long been asking for.
What You Need To Do About It
If you’re an MVPD, you need to be like Comcast. Innovate. Strike deals with Netflix, Amazon, Hulu and every other SVOD or AVOD OTT service. Make sure your program guide and interface are pretty and user friendly and functional. (Talking to you FIOS: our guide keeps getting less functional and more cluttered with your own internal promotions. When we want to watch CNN, we don’t need to navigate through ads for your VOD movies. All you’re doing is driving us to the CNN app on Roku.)
If you’re a network, use your carriage deal negotiations to push the MVPD to innovate and work with them to ensure you are not a roadblock.
2. Alexa Is Now Mobile
Amazon announced that it was now including Alexa functionality in its Android and iPhone apps, so that you can now find out the capital of Zambia (Lusaka) when you are away from home.
More importantly, you can order things from Alexa and use the smart home skills (except door lock) remotely, thus giving Amazon even more data on your likes and dislikes.
Why This Matters
We’ve long suspected that Alexa is just a way in for Amazon, that it’s the forefront of a voice-operated operating system that’s going to be the primary way that Amazon interacts with us. So that we can ask Amazon to order us a new pair of running shoes and Alexa launches a quick slideshow on our TV sets via Fire TV, highlighting the style and color options available to us.
That’s not necessarily a bad thing, if handled correctly, but it’s got a lot of privacy issues attached and Amazon will need to deal with them.
From a purely TV-centric perspective, it gives us the ability to add shows to a watchlist whenever and wherever, which may lead to increased viewing for shows that are able to establish a strong word-of-mouth campaign.
What You Need To Do About It
Remember to update your Alexa skill strategy. If you’re a network with a show to promote, think about including Alexa in your marketing strategy. We are big fans of voice controlled anything and we think Alexa is here for the long run.