Cord Cutting Spike is a Huge Opportunity for Content Owners

Experts have made predictions about the end of cable television for the past 15 years. Today, their predictions are becoming reality considering there are now more Americans using streaming video services than cable subscriptions.

It’s the age of the “ great unbundling ”, hundreds of thousands of cable subscribers are to unbundling their services or unsubscribing completely to make use of more convenient and less expensive streaming services.

Cable providers lost around 762,000 pay-TV subscribers in the first three months of 2017— a historically strong season for cable. Cord-cutting trends are only accelerating. Five times as many people left their cable providers this year, compared to the same 3 month period last year.

The continued migration of cable subscribers to streaming services has caused ripples among even the mightiest media empires. For example, ESPN, recently laid off prominent on-air personalities that included former NBA and NFL players and journalists . Additionally, Spike TV, the most watched network on Viacom TV with 704,000 average viewers, is being forced to rebrand into Paramount Network just to survive.

The cord cutting spike is affecting both TV service providers and content owners. Content owners are directly impacted by the TV service providers’ budget constraints and as cable’s viewers continue to decline, there isn’t any room to for them to take risks on new or innovative content.

While this trend doesn’t bode well for paid TV service providers, it does provide a unique opportunity for content owners. As more viewers turn away from traditional ways of consuming video content, content owners and creators are able to meet them in their new channels.

Where are the viewers?

Although general dissatisfaction will always remain a factor, the main reason so many viewers are leaving their TV service providers is the availability of other low-cost streaming options. What used to cost around $50 a month, only costs $8 a month with streaming services such as Netflix and viewers are quick to make the leap.

We live in the era of binge-watching and digital consumers are demanding instant gratification. Streaming services aren’t only cheaper, but viewers can watch the content they want, anywhere and on any device without any advertisements. Mike Biard, Fox Networks distribution president recognized this demand saying, “There has been a proliferation of content outside the traditional pay-TV system...Consumers are itching to get more content on their terms, and they're finding it in many places".

Curation is another demand of today’s digital consumer that cable has struggled to deliver. Netflix, Hulu, and HBO Go have curated content and smart playlists that viewers appreciate and strongly prefer over the aimless channel surfing of Cable.

Traditionally, you’d have to surf through hundreds of channels or endlessly scroll through a directory in hopes of landing on something interesting on TV. Hundreds of channels call out to viewers with syndicated reruns, reality TV, and the occasional movie that is about a quarter of the way in.

Today, viewers can just go online or to their streaming platform and find exactly the content they want or easily find something new from a curated list based on their viewing history and preferences.

The Cord Cutting Spike = Opportunity for Content Owners

The cord cutting spike has given consumers an instability for content, giving content owners and content creators the golden opportunity to capitalize on this demand. In the past, content owners primarily relied on TV service providers as the gatekeeper between their content and an audience.

Today, content owners are able to capitalize on the mass migration of viewers to over-the-top (OTT) apps, digital networks, virtual MVPDs, and skinny bundles. It’s no longer necessary to get caught up in the MVPD shuffle to shave costs and protect margins. Content owners now have the freedom to focus on creating and distributing their own high-quality content directly to their viewers or their own website or whatever platforms their viewers are on.

Part of this opportunity requires content owners to revise their content strategy and rethink how they plan to make money from their content. Most streaming platforms operate under subscription-based or SVOD model and structure their licensing agreements appropriately.

If content owners have a strong fan base and frequently release new content, they can take advantage of digital video pricing models (like SVOD) and start maximizing their revenue without a middleman. They also have the options of YouTube and Vimeo, ad-based (AVOD) models that take a percentage of content owner's revenue. If a content owner is still working on developing their audience, websites like Youtube make it easy to get started and helps drive more attention content. Although YouTube isn’t the ideal way to monetize premium content. Once content providers have a well-developed audience and content library, they are much better off moving off YouTube and using a content management system like Zype to monetize and distribute their content.

The Future of TV Networks

If the last few years are any indication, cord cutting will continue to negatively impact TV networks. The MPVD industry will likely continue to struggle to sustain itself and survive. Especially considering even the largest networks such as ESPN and Spike TV are being forced to make drastic internal changes, the smaller networks will naturally be more severely impacted.

In this new era where viewers are demanding premium content for a substantially lower price, it’s up to content owners to take charge of their own future and seize the opportunity to own their content, own their audience and be independent of the traditional paid-tv middlemen.