Is Cord-Cutting and the rise of OTT the death of traditional

TV?By Lucy Peters

Image by Pawel Kadysz (Unsplas)h Link: https://unsplash.com/search/television?photo=yKPj4oi9m74

The rise in OTT services and the practice of cord-cutting will not lead to the end of traditional television although it will

change the way television is produced and delivered

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Cord-cutting = individuals cancelling cable television subscriptions and turning to "over-the-top" services

Strangelove, Michael. Post-TV: Piracy, Cord-cutting, and the Future of Television. N.p.: n.p., n.d. Print.

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OTT (Over the top) = delivering content over the internet instead of through cable pipes or satellite signals

Poggi, Jeanine. "THE CMO'S GUIDE TO OTT; How marketers can prepare for cord-cutting." Advertising Age 13 Apr. 2015: 0026. Academic OneFile. Web. 17 Oct. 2016.

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“The goal of OTT is to reach the approximately 10 million broadband subscribers who do not also have pay TV packages.”

Poggi, Jeanine. "THE CMO'S GUIDE TO OTT; How marketers can prepare for cord-cutting." Advertising Age 13 Apr. 2015: 0026. Academic OneFile. Web. 17 Oct. 2016. Image by Splitshire (Pixels) Link: https://www.pexels.com/photo/person-apple-laptop-notebook-1171/

“From 2003 to 2008, the average household allocated an average of 8 minutes a day to using the Internet for leisure. By 2011 that had increased by 50%, to over 12 minutes a day.”

Prince, Jeffery, and Shane Greenstein. "Measuring Consumer Preferences for Video Content Provision Via Cord-Cutting Behavior." Journal of Economics and Management Strategy 25.2 (2016): n. pag. Web. 17 Oct. 2016.

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This increase in internet use websites like Netflix and Hulu became successful at streaming TV

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Netflix allows for more mobility and choice “we are moving into a world in which only worthy programming can survive.” “Viewers must seek out programming in order for it to thrive, or even survive.” Sapan, Josh. "Outside Voices: The Death of Indifferent TV Viewing." The Wall Street Journal. Wsj.com, 06 May 2015. Web. 17 Oct. 2016.

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Mark Malkoff’s Netflix experiment “demonstrated that he could watch Netflix titles on a variety of devices and in multiple locations, at one point watching St. Elmo's Fire (1985) on his iPhone while actor Andrew McCarthy pulled him along in a wagon through Central Park.”

Tryon, Chuck. On-demand Culture: Digital Delivery and the Future of Movies. New Brunswick, NJ: Rutgers UP, 2013. Print.

OTT services allow consumers to watch TV anywhere

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These changes in consumption patterns changed the way millennials view of TVs“To me, [a TV is like] a blender, I may need one one day; it might be nice to have one. But it’s by no means essential.”“I watch it more for the social experience, to have something to talk and joke about, than for the content.” Ms. Taylor, 25

Williams, Alex. "For Millennials, the End of the TV Viewing Party." The New York Times. The New York Times Company, 7 Nov. 2014. Web. 17 Oct. 2016 Image from Kaboom Pics Link: http://kaboompics.com/one_foto/849/man-using-

stylus-pen-for-touching-the-digital-tablet-screen

Williams, Alex. "For Millennials, the End of the TV Viewing Party." The New York Times. The New York Times Company, 7 Nov. 2014. Web. 17 Oct. 2016

Another way millennials save money is through password sharing

Password Sharing = The process of using other people’s log on information to access OTT services “There’s an intimacy, a social protocol. You would never ask someone for their Netflix password unless you were very close to them.” 

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TV providers were forced to change their tactics for marketing their shows

“Old tactics don’t work. For decades, TV networks found that scheduling a new show after one that was already successful was a form of guaranteed sampling, if not outright success. That just isn’t the case anymore.”Sapan, Josh. "Outside Voices: The Death of Indifferent TV Viewing." The

Wall Street Journal. Wsj.com, 06 May 2015. Web. 17 Oct. 2016.

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These changes worried TV producers as they saw some sudden drops in TV subscriptions

Image by Ed_Davad (Pixabay) Link: https://pixabay.com/en/bus-stop-bus-waiting-john-cleese-391242/

Hagey, Keach. "5 Things to Know about Cord-Cutters." The Wall Street Journal. Dow Jones & Company, Inc., 12 Apr. 2015. Web. 17 Oct. 2016.

“The 13 largest pay TV providers in the U.S., representing 95% of the market, lost about 125,000 video subscribers in 2014.”

From 2013 to 2014 the number of broadband only homes in the US increased by 10%, from 9.9 million to 10.9 million

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“90% of Netflix subscribers, 90% of Amazon Prime subscribers, and 88% of Hulu customers also maintain pay TV subscriptions.”

Samit, Jay. "OTT Video Is Creating Cord-Extenders, Not Cord-Cutters."Harvard Business Review. Harvard Business School Publishing, 17 July 2015. Web. 17 Oct. 2016.

These fears that the end of traditional TV was near have not played out

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“OTT is growing the overall pie, not slicing it up. According to Magid’s latest research, instead of fighting over crumbs, OTT is akin to having a second helping.” – Harvard Business Review Samit, Jay. "OTT Video Is Creating Cord-Extenders, Not Cord-Cutters."Harvard Business Review. Harvard Business School Publishing, 17 July 2015. Web. 17 Oct. 2016.

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"What Do You Mean, 'cord Cutting'?" Entertainment Marketing Letter 22.16 (2009): n. pag. Web. 17 Oct. 2016.

As of May 2009 very few US adults who had TV subscriptions had cancelled or had even thought about cancelling their TV subscription

Graph by Lucy Peters

However Netflix became popular at the same time as the great recession in the US causing some people to question the necessity of having an expensive TV subscription

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“households often don’t want to pay for hundreds of channels they didn’t watch.”

“Paid television subscriptions can cost $1,000 per year or more.”

Hagey, Keach. "5 Things to Know about Cord-Cutters." The Wall Street Journal. Dow Jones & Company, Inc., 12 Apr. 2015. Web. 17 Oct. 2016.

Prince, Jeffery, and Shane Greenstein. "Measuring Consumer Preferences for Video Content Provision Via Cord-Cutting Behavior." Journal of Economics and Management Stratagy 25.2 (2016): n. pag. Web. 17 Oct. 2016.

Image by Stevepb (Pixabay) Link: https://pixabay.com/en/credit-squeeze-taxation-purse-tax-522549/

As the economy stabilized households stopped cutting out luxuries in the same way and cord-cutting diminished

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“And many millennials who have ditched their TVs still actually love television. They may, in fact, watch more of it than ever since unplugging, thanks to the relatively newfound ability to catch up on their latest shows on their phones or tablets anywhere, at any time."

Television is still very popular

Williams, Alex. "For Millennials, the End of the TV Viewing Party." The New York Times. The New York Times Company, 7 Nov. 2014. Web. 17 Oct. 2016.

Image by Piotr Łohunko (Stock.tookapic) Link: https://stock.tookapic.com/photos/64152

TV is still a shared cultural experience “We live in a world of on-demand entertainment, where people can consume programming in many formats at any time. That makes shared, cultural experiences more important than ever.”

Wortham, Jenna. "No TV? No Subscription? No Problem." The New York Times. The New York Times Company, 6 Apr. 2013. Web. 17 Oct. 2016.

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Though OTT has changed the viewing habits of

consumers and business model of the television industry, television in its

evolving forms is thriving.

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Work Cited Hagey, Keach. "5 Things to Know about Cord-Cutters." The Wall Street Journal. Dow Jones & Company, Inc., 12 Apr. 2015.

Web. 17 Oct. 2016.

Poggi, Jeanine. "THE CMO'S GUIDE TO OTT; How marketers can prepare for cord-cutting." Advertising Age 13 Apr. 2015: 0026. Academic OneFile. Web. 17 Oct. 2016.

Prince, Jeffery, and Shane Greenstein. "Measuring Consumer Preferences for Video Content Provision Via Cord-Cutting Behavior." Journal of Economics and Management Stratagy 25.2 (2016): n. pag. Web. 17 Oct. 2016.

Samit, Jay. "OTT Video Is Creating Cord-Extenders, Not Cord-Cutters."Harvard Business Review. Harvard Business School Publishing, 17 July 2015. Web. 17 Oct. 2016

Sapan, Josh. "Outside Voices: The Death of Indifferent TV Viewing." The Wall Street Journal. Wsj.com, 06 May 2015. Web. 17 Oct. 2016.

Strangelove, Michael. Post-TV: Piracy, Cord-cutting, and the Future of Television. N.p.: n.p., n.d. Print.

Tryon, Chuck. On-demand Culture: Digital Delivery and the Future of Movies. New Brunswick, NJ: Rutgers UP, 2013. Print.

"What Do You Mean, 'cord Cutting'?" Entertainment Marketing Letter 22.16 (2009): n. pag. Web. 17 Oct. 2016.

Williams, Alex. "For Millennials, the End of the TV Viewing Party." The New York Times. The New York Times Company, 7 Nov. 2014. Web. 17 Oct. 2016

Wortham, Jenna. "No TV? No Subscription? No Problem." The New York Times. The New York Times Company, 6 Apr. 2013. Web. 17 Oct. 2016.