Parsing the Media Prognosticators -- Charlene Weisler

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After attending a range of media events in 2013, I found that there were pronouncements and predictions at one conference that often contradicted those at others. Is cord cutting generational, shaved or non-existent? What is responsible for the slow pace of a standard cross platform measurement? What is the future of set top box data and Big Data in general? How will (choose one or more) dynamic ad insertion, addressable advertising, programmatic buying, etc impact the sales side of the industry?


Some interesting assessments could be found at the VideoSchmooze Online Video Forum which offered lively de-constructions of media shibboleths. Nothing was sacred. And because it was scheduled in December, it provided a last word, of sorts, before the end of 2013.

According to industry analysts Craig Moffet and Bruce Leichtmen, there are conflicting stories in the press about whether cord cutting, Netflix, fragmentation, the bundle, the internet, you name it, is a threat to the standard business model. Their session “A Deep Dive into Video’s Tectonic Shifts” demonstrated that all is not what it appears to be.

As we look back at 2013 and forward to 2014, Moffet’s and Leichtman’s provocative panel separates the truth from the hyperbole. See a short video here.

Cord Cutting

Is cord cutting an issue? According to Moffet, cord cutting de-accelerated in 3Q13. That means it is going down, unlike what was reported in the mainstream technology press at the time. The fact that it was misreported as accelerating indicated to Moffet that “it speaks to a desire in the tech press for parables – overthrowing the oppressive MVPDs. But the math tells you otherwise.” Yes, there are those households that are cutting the cord. “There is no question that people are cutting the cord but it is not a torrent. It is a trickle.”

Pay TV

What does seem to be losing ground is Pay TV and that is because cord cutting, or lowering your media bill, is economically driven. Moffet noted that the past twelve months were the worst performing months in Pay TV history. Why? “Economic reasons and alternatives at the low end of the spectrum,” posits Leichtman. Young people actually crave full subscription cable and are deferring their subscriptions until they can afford it. Moffet, citing a sample of one – his 27 year old daughter – reaffirmed this theory. “If you have cable it means that you are rich and it is cool to be rich, he says that she says.


Somewhat surprisingly, Netflix was cited as a company that has a “dirty little secret” according to Leichtman. “Netflix churn was 70%. Now it is 50%. It is low price and high churn which gives it a low barrier to entry and a low barrier to exit. Netflix is up to 32 million subscribers but its target is 60-90 million.” Obviously this has not negatively impacted the stock price but it is still surprising to hear. However, Netflix can hurt the ecosystem by gaining rights to programming from the studios and networks which may undervalue certain content. In fact, Moffet says that licensing to Netflix is like crack to the networks. “The networks are addicted to licensing content to Netflix.” The problem will exacerbate at the time when digital demands only the good content from networks instead of all content.


Don’t expect unbundling to happen anytime soon according to Moffet. “It is harder to blow up the ecosystem than you think. The reason you can’t get networks unbundled is that programmers don’t want to sell it that way.” The forced packaging of smaller niche networks (or highly expensive but not universally popular networks) with their larger mainstream siblings keeps both programmer and MVPD profitable.

The future of media is still to be written. But right or wrong, many of these ideas are provocative and make good talking points. It remains to be seen whether they have stamina in the marketplace and predictability of what will come. Stay tuned.

Interview conducted by Charlene Weisler, Weisler Media LLC. She can be reached through herCharlene Weislerresearch blogwww.WeislerMedia.blogspot.comor Full disclosure: Charlene hosts a street art blog on The Starry Eye blog community

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