Nigerian-American Head of IT Asset Management, Mott MacDonald, USA, Chris Tunde Odediran, in an interview with Mike Bamigbola, Brand Times anchor, dissects the emerging trend of cord-cutting in television broadcasting, the gains to the viewers, the threats to cable TV brands, the challenge to media planners and brand managers, and what all parties must do, to be in the flow of the unstoppable cutting-edge technology.
What is cut-the-cord all about in TV viewership?
Cord cutters are those seeking a new media experience using modern technology to get the television programming they want, any way they can get it, flexibly and cheaply. They are technologically savvy and don’t mind some inconveniences for the freedom of watching anywhere at so little cost. You can almost call it follow-me TV service. A typical cord cutter knows exactly what would satisfy his or her need and buys exactly that, instead of a whole bundle of TV package of which only 20% or less is used. In the simplest terms, a cord cutter can buy one or two new station programs, two direct sports programs and a movie station supplemented by various free movie providers, streaming all of these to the TV, computer, tablet, game box or mobile phone, or a combination of all.
How recent is the idea?
Since cord-cutting is largely reliant on high-speed internet, it started less than 10 years ago, but has become really popular in the last three years. In the US, Netflix and Hulu made it inviting when they started the “watch instantly” movie and TV programming services on the web about 8 years ago. Also relevant was the release of hardware such as Roku, Apple TV and Chromecast, which allowed TV to be easily streamed through apps. Lastly, the introduction of smart TV in recent years – which could connect to the internet directly, install apps and deliver TV programming through many sources – meant that cable television was now just an option.
How is it redefining media programming and consumption?
In terms of programming, streaming TV is allowing a la cart selection of content, which means you could pay far less if you can select just those stations that you watch. It is comparable to what happened in the music industry some years ago. Before Napster, you needed to buy the whole music album. But through streaming, you can now buy music song by song at Spotify or Apple Music and the like.
As regards consumption, it does not necessarily mean that consumption will decline. It just means that consumption will slant towards content that is in demand. TV stations will no longer be able to sell anything they produce. The effect is that programming quality will improve as the TV stations and independent producers focus on meeting the tastes and expectations of their audiences.
What are its implications on cable TV brands in Nigeria, like DSTV, Startimes, Gotv, and others?
The only thing stopping the entrance of Nigerian consumers into streaming TV is internet speed. Those resident in locations where high-speed internet is now available can already enjoy programming from the internet if they have smart TVs and other equipment that can connect. I am not a big fan of Nolllywood but if I feel like watching a Nigerian movie, I can do that quickly through apps on Roku and Amazon Firestick.
If 5G broadband becomes available today,that will mark the gradual demise of most cable TV providers. We should expect local entrepreneurs to string together a local alternative to cable TV very quickly.
Most people don’t need all the channels bundled into their subscriptions. People want to choose and pay for only what they need. For instance, someone who just wants to watch CNN and English Premier League does not need all the other channels.
Another area of concern to traditional cable companies is the big internet companies. Facebook and Google are now creating their own streaming services and buying programming directly. For instance, Amazon is now going to begin streaming some of the English Premier League games, while Google and Facebook are working towards the same. Because I can already watch YouTube and Facebook on my TV, cable TV becomes optional.
What are its implications on network TV brands in Nigeria, like Channels TV, NTA, AIT, and others?
The TV brands will suffer less disruption because at the heart of it they are just content makers, but they will be exposed. If customers are able to directly pick and choose what TV programs they want, it means that many of them will have to be much better in order to do well. Those who rely on the cable customers buying any junk they produce may no longer be able to bundle weak content along with others popular programs.
In addition, TV providers will face stiff competition from independent content producers. The future will be about the content rather than the station. If a big station does not have good content, it will lose out to smaller production companies that have good programs. It is a simple as that.
What does this mean to the media planner and buyer in advertising?
The media planner will need to understand the audience much better because the channel will no longer be easy to track. However, it will not be a difficult task. Through the use of data analytics, the planner will be able to measure quite accurately who is using the content, through which medium and at what frequency. With those metrics, it will be possible to know which media to buy, how much to buy and when to buy. In fact, advertising will be more effective and accurate, but it will only be possible for those that understand the game of analytics and have the tools to measure audience behavior.
Could you mention some US cable TV brands affected by cut-the-cord, and the statistics?
Two of the biggest cable TV companies in the US, Comcast and AT&T, illustrate quite well the trend in the US. Last month, Comcast announced it lost 224,000 TV subscribers within three months. AT&T was expected to report over a million TV subscribers canceled in the 3rd quarter of 2019.
How are these cable brands adjusting to the reality?
Most of them are switching to delivering just Internet services and content. Since high-speed Internet connectivity is best delivered through hardware, these same companies become the backbone of streaming TV. Their focus is on improving the reliability and speed of the Internet through which they can attract more customers and increase prices.
Comcast executives have disclosed that if TV customers are not profitable, they plan to push them over to the internet only. This follows AT&T’s strategy in pushing cord-cutters that are looking for the cheapest plans of their TV services.
Here in Nigeria, there is yet little or no noticeable effect of cut-the-cord. Does it mean cable brands like DSTV, Startimes, Gotv, etc could continue to carry on with business as usual?
They will be complacent at their own peril. The only thing they have in their favor is the absence of high-speed internet. That will not last forever. Even if cables cannot be laid in Nigeria, 5G technology will disrupt the market. For this reason, the DSTVs of this country will do themselves a lot of good by preparing for the future, which may descend sooner than they may expect.
The important thing to appreciate is that modern technology is often not affected by geographic boundaries. Just think about what happened to the phone companies in Nigeria through WhatsApp and Telegram. 70 per cent of my calls to Nigeria from the US is now through these services.
What should these cable brands do differently to position for the future?
If I was running a cable company, I would accept that my customers will cut the cord someday, and focus on preparing the technology to deliver any kind of content through the internet. I would also work on data analytics so that I can prove to advertisers the reach of my services, so that they can use my organization to reach their audiences. The future will be agnostic to channels but welcoming to content. The cable companies should focus on delivering content fast to any device – phones, tablets, computers, gaming machines, TVs and anything that we can’t even conceive of today. Flexibility is the name of the game.
What are the wider implications of the changing face of the media?
The changes that are happening that we understand today will be nothing compared to what we don’t know when machine learning, Artificial Intelligence and robotics are fully mature. Let’s not even go there because we don’t have enough knowledge to be honest. However, from the little we know, computers will be able to tell what you want to watch at any moment. They will read you, review your watching history for the past few years and deliver to you what you want at exactly the time you want it. Many young people in the advanced countries no longer watch what we call the TV. They watch content. They catch their content on any available device, most of the time, mobile phones, computers and Xbox.