Cord-cutting and the future of TV

Think for a minute about how you watch programmes now and how that compares to how you watched five years ago?

Different? For me, it’s not just the classier genre of show I’m watching (naturally!), I’m also discovering, viewing and sharing in a completely different way.

Five years ago my viewing consisted of scheduled TV programmes on a TV, copious DVD box sets and the occasional download of the latest American drama.

A typical day now consists of Netflix, iPlayer, 4OD, regular TV and a bit of YouTube thrown in for good measure, watched on a tablet, smartphone, TV set, work laptop and a Chromecast, with programming from channels that barely even existed five years ago. These devices and platforms are interwoven to construct my own personal viewing schedule; a fingerprint of viewing which is completely unique to me.

Now, all our screens in the house can access an infinite amount of diverse programming that we are choosing to spend time with, and this ever increasing personalisation of viewing is set to continue. ‘Cord-cutting’ – the cancelling of a pay television subscription in favour of an entirely internet-based service – is becoming a feasible alternative to traditional broadcast television.

Whilst cord-cutters are still in the minority in the UK, they are growing and do present a threat to the traditional service providers. Services like Amazon and Netflix have also changed how we watch content, with viewing habits now defined to some extent by binge watching of full series. No longer do we need to wait to be drip-fed our favourite programme at a time that broadcasters decide: we can choose to spend an entire weekend on the sofa watching every episode of our favourite shows in one go. What’s more, these new platforms are content creators as well, throwing millions of dollars at new, exclusive proprietary content – Orange Is the New Black, House of Cards, Marco Polo and more. Indeed, a stated goal of Netflix is, according to Ted Sarandos, their Chief Content Officer, “to become [US television network] HBO faster than HBO can become us”.1

In response, we have seen catch-up services grow, with all major UK broadcasters offering on demand content, and in the US, broadcast giants HBO and CBS now offering on-demand streaming services. In the UK we’ve also seen Sky spending millions creating new content, and that’s before we even talk about the huge battle ground that is sports. Clearly, the UK’s biggest pay-TV broadcaster is rightly focusing on the things that Netflix cannot offer, as well as creating and broadcasting content that will convince its eleven million UK subscribers that it is still worth the money.

But, has the horse already bolted? Well, no. Ofcom data tells us that the average amount of time spent watching TV each day has stayed almost identical, shifting down slightly to 3 hrs 40 mins in 2014, from 3 hrs 52 mins in 2013, despite the growth in the number of channels and platforms for viewing. And if you want to watch live premium sports on a regular basis, a BT or Sky subscription is really the only place to do so – hence their £5bn investment in buying the Premier League rights. It is the content – be it TV shows, movies, sport – that they, like others, believe is key to winning the hearts and wallets of current and prospective viewers (and subscribers).

So the public are all still talking about last Bake Off and who is going to go next in Strictly, but these moments have now been complemented by our weekend binge on Orange Is the New Black or House of Cards. The content we are all talking about may still be coming through our TV screen, but the sources are multiple and varied like never before. As Kevin Spacey notes, (in his role as Exec Producer of the Netflix-created House of cards) “What a company like Netflix is doing is the ultimate expression of individual control, proof of what people’s attention span really is”.

And this is the challenge facing media owners and broadcasters alike – how to stay relevant, top of mind and preferred in a world of fragmented viewing and endless content. Whilst cord-cutting may not become the majority choice for another decade or more, we are shifting inevitably towards an ‘anywhere, anytime’ model for content consumption, where everything you want to watch – TV shows, movies, sport – is accessible truly on demand, on any device. However, we are not quite there yet and content (the very best TV shows, movies, sport) appears to be the battleground on which Netflix, Amazon, Sky and others will fight it out. This will be the true challenge to creators and distributors alike: consistently offering quality programming that people choose to spend their time with (and money on).

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