ESPN says: Cable subscribers defecting to the Internet? Nah. Move along, nothing to see here
In the penultimate scene of "Animal House," Kevin Bacon tries to stop a stampeding crowd from running him over. "Remain calm, all is well," he continues to yell at people to no avail, and eventually he is crushed into a pancake.
The cable industry may be doing a Kevin Bacon imitation. On Monday, Walt Disney Co.'s ESPN released research it did using Nielsen information to try to show that stories about people dropping their pay-TV service in droves in favor of trying to find content online has been greatly overblown.
"The amount of 'cord-cutters' -- multichannel homes with a high-speed Internet connection that drop their cable/telco/satellite subscriptions but retain their broadband connection to watch television -- netted out to only 0.11% of the television population over the past three months," ESPN trumpeted. More important to ESPN was that "people who were heavy or medium sports viewers showed zero cord cutting."
Although it is true that the level of coverage about so-called cord-cutting might be disproportionately high, that doesn't mean it isn't happening. The number of people subscribing to cable has dropped for two straight quarters. Cable operators blame the economy more than cord-cutting, but they may have their heads in the sand a little. A decade ago it would have seemed outrageous to suggest that one day people would abandon landlines and go with just cellphones. Now that's becoming more and more common and in another decade or so could be the norm.
Rather than spending time trying to prove there's no threat from cord-cutting, cable programmers and operators should focus on figuring out how to distribute their content on new platforms in ways that won't jeopardize their current revenue model. Sooner or later an online video company is going to knock on ESPN's door and offer it the same $4-per-subscriber rate it gets from cable and satellite operators. They can say no because they don't want to jeopardize their current relationships, or they can say yes because it is yet another way to get their content to consumers.
As soon as someone finds a strategy, call me on my cellphone.
-- Joe Flint
Photo: Kevin Bacon in "Animal House." Credit: Universal Pictures