If It Ain’t Broke, Don’t Fix It

Like Lauren, I was inspired by our class discussion to do some further research on cutting the chord. She explains:

Sling TV is a service offered for $20 a month with no contract and the ability to watch on various online devices. It was newly released in early 2015 but isn’t the first of its kind. Many entrepreneurs are taking advantage of the downfall of cable to introduce something even better – selective channels for a much lower price.

Personalization is a growing trend within media. Netflix, YouTube and even Facebook all employ strategic algorithms in an effort to keep users on their site for longer periods of time. It makes sense for cable TV to fall in line with the personalization train by allowing users to select the few channels they watch the most for a reduced cost.

It’s not like we watch all of our hundreds of channels either.

If you have cable TV, you probably don’t watch most of the channels you get. The average American television household receives 189 channels, up from 123 in 2003. But we’re watching only 17.5 of those channels — nearly unchanged from 11 years ago, according to a new report from Nielsen.

-The New York Times

However, the idea of unbundling cable is potentially one that looks better on paper than it actually is. Both Time and The New York Times have published pieces explaining the potential damages that could come from such moves.

Back in 2010, New Yorker business columnist James Surowiecki wrote that if the bundle disappeared, the cost per customer for each channel would soar, “perhaps on a customer-by-customer basis.” The likely result would be that loads of channels would go out of business, and that the average customer would pay roughly the same amountmonthly he was paying for the big bundle, only with far fewer channels.

-Time

But now consider what would actually happen to prices. The cost of maintaining the wires to your house and keeping the lights on at the cable company wouldn’t go down, even as you order fewer channels. After all, it costs just as much for the cable company to deliver four channels as it does 189. There is good reason to expect your cable company to raise your basic service charge to cover those expenses, offsetting part of your per-channel savings.

-The New York Times

The best analogy I’ve seen compares the unbundling of cable to the airline industry and its unbundling of flight service packaging. My experiences with that have been on both sides of the spectrum. Flying Southwest is usually a good time. Spirit Airlines, not so much. But you’re paying for what you get.

With as much frustration as people go through with Time Warner Cable, Dish and DirecTV, maybe we should take a breath and realize our TV lives are pretty good. I’m all about innovation and disruption, but there’s a reason for the saying “if it ain’t broke, don’t fix it.”

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