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Content for cord cutters is going to get harder to find, industry executive predicts

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While millions of cord cutters are eagerly awaiting their chance to subscribe to HBOGo, the CEO of the company that helps ensure that HBO’s over the top content looks good is skeptical about when that might happen. Darren Feher, the CEO of Conviva, thinks things will get worse for cord cutters before they get better.

Instead of watching Game of Thrones via an a la carte HBOGo subscription, they’ll face higher fees for content aggregators like Netflix and Hulu and will find more content inaccessible unless they have a pay TV subscription, he thinks. Even Hulu’s backers have toyed with making the site accessible only to those who have a pay TV subscription.

“The whole industry is doing a lot of experimentation in places and markets where they are trying to figure out what will work for the U.S. market,” said Feher, who prior to the top job at Conviva was the CTO of NBC-Universal responsible for activities such as streaming the Beijing Olympics. “But before that, in the next 12 months there will increasing pressure against cord cutters. The whole authentication thing, where you can’t watch content unless you have a cable sub, will be a mess for consumers.”

In short, while Nordic viewers get their HBOGo a la carte, those of us in the U.S. may have to wait, no matter how many webcomics and industry insiders demand it. Even vague suggestions from HBO executives are compromises that limit the experience to an app.

However, there’s a light at the end of the tunnel, according to Feher. “Inevitability consumers will tell content creators what they want and the content guys will have to respond. There’s a whole upcoming generation of ‘cord nevers’ that the industry has to consider.”

For example, he notes that while many in the industry expected online viewership of the Super Bowl to be lower that it was, given that it was a weekend and people tend to have parties where they cluster around the big screen TV to watch it. He and others were surprised at how many online watchers there were and how many came from sites with an .edu address.

“No one brings a TV to college anymore, and so it’s logical to ask if they will ever want to watch outside of this way they’ve gotten used to,” said Feher. “But in the short term there will be a lot more pressure on aggregators like Netflix and Hulu, and the consumer will feel that in less content or higher prices.”

The challenge for the industry is complex, and is one where technology is pressuring business models designed for the old way of delivering television — multicast from one to many over a guaranteed and pay-TV-provider-controlled connection. The internet has made viewing content more of a one-to-one proposition and the rise in over the top services and multiple devices on which to watch the content has made the entire experience disjointed.

Conviva has stepped in to ensure video quality in this brave new world with software that parses a lot of data in the cloud and has software agents that make decisions about how to adapt the video in response to problems. If the internet is congested for example, it may route content via a different route. If the video is buffering in your home because your Wi-Fi is wonky it may drop down to a lower bit rate.

But outside of technical solutions, Feher also thinks there’s a business model that will help content companies and broadcasters make money so they can avoid “trading analog dollars for digital pennies,” as NBC-Universal’s Jeff Zucker (and Feher’s former boss) has said. It may be a matter of charging people more money for HD streams or even more for 4K streams that require a whopping 25 Mbps connection. ISPs are trying to build this level of granularity into their billing systems and networks.

It might also be as simple as using the targeting abilities available in the digital world to better monetize a viewer by showing him or her more relevant advertising or charging different prices for a la carte content. Essentially he’s proposing that the data driven model we’re seeing drive success in other industries takes a stab at changing television. I hope the results are worth watching.

24 Responses to “Content for cord cutters is going to get harder to find, industry executive predicts”

  1. Bill C

    Hi Stacy,

    I don’t think you quite understand the mentality of the Cord Cutters. You seem to be looking at things from the CableCo point of view in that profits will be made, regardless! It is exactly that thinking that got us to be cord cutters in the first place!

    For every way CableCo can think of to charge a new or higher fee, we can think of a way to circumvent it. And, as CableCo continues to find new fees and charge higher prices, our numbers will continue to grow!

  2. Generic Name

    If they make things harder to stream legally it will simply drive more people to pirating.
    If they can’t see this then I honestly think they are delusional. Pirating content has gotten so easy an average 15 year old can set up a HTPC that can stream literally any show or movie ever made for free with no fear of being caught. Streaming isn’t going away, the 5% of us who have cut the cord aren’t a passing trend we are the first few rolling rocks at the beginning of a landslide.
    TV Industry PLEASE put your content online and let us pay for it, if not I mourn your eventual demise.
    Cable in my opinion is already dead, I wouldn’t go back to cable if it were free.

  3. We’ve cut the cord since moving to our new Condo in early 2011, and we’ve never been happier! I bought two (2) Apple TV’s that hook up to 37″ LCD and 46″ LCD TV’s. Since we’ve got new baby, we’ve enjoyed watching Sesame Street on YouTube and Netflix for many children’s content. I enjoy watching Wall Street Journal and CNET’s The Apple Byte to keep up with Tech News. We’ve also ripped most of our previous DVD content to one 2.5″ 1TB Drive to enjoy our movies. We also bought Mohu Leaf Standard for only $40 this year. With so much content over the Internet and over the Air, we haven’t had the need to subscribe to satellite or cable.

  4. Frankly, I can live without the content if that is the attitude the content-distribution industrial complex takes. The horse is out of the barn and more and more consumers are figuring out that they don’t really need to pay $1000/year to be entertained. I can pick up 27 OTA TV channels with my Mohu Leaf Ultimate antenna, an indoor option that’s a lot less attractive than the old rabbit ears and cost $56 plug taxes and shipping through Sam’s Club. Add to that Netflix, Amazon Prime, ESPN3 (through PlayOn), MLB.TV, and several other channels I’ve added to my Roku, and for about $55 less per month than I was paying DirecTV, I have a lot more content I want. Oh, and I don’t have to change the channel when some inappropriate commercial comes on nearly as often.

    So, go ahead and try to stick it to the consumers. You’ll just cause even more folks to dump your sorry excuse for entertainment.

  5. sugray

    I use TVPortal on my android tablet to stream thousands of TV programs and movies for free. I increased my internet to avoid the latency issues and love it. I can sit and watch TV programs that aired a few days ago.

  6. Howard Smith

    You can get plenty on any bit torrent site and most people have so many things to keep them busy now you don’t miss the video at all. I think the content providers are a precipice and they don’t realize it. They are not just competing with other video now. There are a plethora of other things to take up the limited time and attention of potential viewers. They are the next generation of subs and they will not be the TV Watchers of the past. I predict you will see within the next 3 years major changes coming. For those Content Kings who don’t change they will ride it out on their banked earnings until it’s to late and they will go away very fast.

  7. Curt Swartzwelder

    The Holy Grail for content providers and cable providers (including satellite) is live sports programming. If the sports leagues ever allow their games to be purchased directly without a video subscription, the providers would start to hemorrhage subscribers.

    For example, I like to see my Pens games but I can’t get those over the air and they are only available on Root sports, a cable channel. The NHL game center is not an option because the blackout local games. This leaves me stuck with a cable subscription full of mindless dribble that I absolutely hate.

    • They already do. I subscribe to MLB.TV premium for $130/year. I could pick up the NHL GameCenter Live for $50/year. The NFL still airs most of its games OTA for free. And a few NBA games a week are still available OTA. There is also a lot of college games on OTA TV. And if you ISP is a partner, you can watch ESPN3 for no additional cost over your monthly internet bill. There is a lot of sporting events, including college basketball and football on ESPN3. Admittedly, its not the full ESPN/Fox Sports package, but its more sports than most folks have the time to watch and for a lot less money than the full cable/satellite bill, far more sports than most of us had until just a few years ago.

  8. I’m not opposed to companies like Netflix charging more money provided it doesn’t follow the cable strategy, i.e. it needs to be “a la carte”. The cable strategy is to force you into buying tons of stuff that you don’t want and charging a high fee for it.

    What I want, and what I believe many people want is to break the practice of bundling. We want choice. Choice on what we buy (no bundling), choice on how we watch it (tv, computer, tablet), and choice on when we watch it.

    What I hope Netflix does is that they put more money into original content. I watched House of Cards when it came out and I thought it was fantastic. I recommended it to people at work and some of them became Netflix subscribers after watching it. The big content companies have been pulled into the modern age kicking and screaming. They want to keep people stuck in the cable tv cage. They have been very reluctant to let Netflix get their new content. So I hope Netflix will simply put more resources into making their own. We already have proof that Netflix can do a great job at it.

  9. Claudio Marcus

    It is more logical to assume that once they can afford to get a TV college graduates will do so. If you can afford to watch on a big TV, you are more likely to add it to your viewing repertoire. And once it is added to the mix, the larger TV experience generally tends to benefit from the best screen available rule.

    • This makes no sense. Someone going to college is reasonably well off by default or at least has access to loans. A tv is cheap. You can buy a perfectly nice, large screen tv for $500. Its the cable bills that are outrageous.

      I seriously doubt that it is the cost for a large screen tv that is keeping college students away from cable. Even more damning for the cable companies is that most dorms include cable. So college students are choosing not to watch cable even when they have it for “free”.

      • Bill Anderson

        “A tv is cheap. You can buy a perfectly nice, large screen tv for $500.”

        That isn’t as “cheap” as you think it is. When your loans and grants pretty much just cover tuition, books, and hopefully housing (if you are in the dorms), and you are going to school full-time 500 bucks is 2-3 months of food. When they already have an iPad, a laptop, and can spend 200 bucks for a monitor/TV that fits it the dorm room, why spend 500 for a “big screen” which will be obsolete when you get finished with college?

        It makes sense if you actually think about the entire picture and not just one number. “Afford” isn’t just for dollars. If you can’t afford the floor space and/or wall space, it doesn’t matter what the price tag on a TV is.

        That said, I suspect a shock is coming for those pushing and making the big screen. I suspect the next generation won’t be so interested.

  10. Only a matter of time before enough people learn how to use a VPN or a free browser extension to access the legal but region-locked content that is available on international sites. E.g. It’s easier to keep up with shows such as breaking bad and walking dead via Chinese video sites (they paid for online rights in China, and they are putting these shows up as soon as they air in the US).
    Check out a simple site like which will show you how to access these shows

  11. HBO/Time Warner seem to be procrastinating and sluggish. Their dragging their feet to get into the internet streaming world paints a perfect picture of fat, old executives not having the slightest clue.

    If HBO doesn’t get with it soon, they will get eaten up by competition in the internet world. They could actually be somewhat competitive with Netflix but with Hulu, Vudu, Blockbuster, Amazon, Youtube, Snagfilms, Hitbliss getting traction… HBO might have just missed the boat!

    I’m so tired of hearing about HBO. I think the media should relegate HBO to taking the backseat and not give them any press. Just let HBO get comfortable in the grave they are digging for themselves and give press to a company that is actually doing something. Fat, old, stinking, rich, dillusional executives need to be put in their place.

  12. We don’t have cable or satellite at home anymore. We do have an OTA antenna, but never use it. The shocked reaction of my kids (7 & 9) when we stay at a hotel and they try to watch “regular” TV indicates that it is only a matter of when, not if, with regards to its demise.