Speaker 1: Get in touch with technology with tech Stuff from how
Speaker 1: stuff Works dot com either everyone, and welcome to tech Stuff.
Speaker 1: I'm Jonathan Strickland and I'm Lauren voc Obama, and today
Speaker 1: we're going to talk about something that is an interesting topic.
Speaker 1: It's really about cable and cord cutting and what is
Speaker 1: the deal there, what's going on with cable. We're not
Speaker 1: going to dive into the technical side of how cable
Speaker 1: TV works, because that's really its own episode all by itself.
Speaker 1: We're talking more about the business side, right right, because
Speaker 1: this is a really rapidly developing industry and and a
Speaker 1: lot of it's kind of freaking out right now. Yeah,
Speaker 1: because of the changes that have gone on in in
Speaker 1: the way that people are consuming content with greater broadband access.
Speaker 1: And actually before before we got started too far into this,
Speaker 1: we we did want to mention that, yes, How Stuff
Speaker 1: Works is owned by Discovery Corporation, which is a cable
Speaker 1: co intent provider. Yeah, it's a company that owns several
Speaker 1: cable channels. So, uh that that is a good point.
Speaker 1: That's something that we definitely need to get out of
Speaker 1: the way. And now it's out of the way. In
Speaker 1: the beginning, there was broadcast TV, and it was okay,
Speaker 1: So broadcast TV. Yeah, we're talking about you know, you
Speaker 1: had you had stations that could broadcast over the air
Speaker 1: as in there they are broadcasting radio waves. They would
Speaker 1: have a transmission antenna that would shoot out broadcast waves
Speaker 1: of TV, and you would have your little reception antenna,
Speaker 1: your little rabbit ears and you would have to tell
Speaker 1: your your your kid brother, no, no, it's still just snow.
Speaker 1: Turn it to the left, No, my left, not your left,
Speaker 1: until you could finally be able to watch all in
Speaker 1: the family or something so um the weird dated references
Speaker 1: that I don't even get anyway, the idea was that
Speaker 1: you would send this all through radio signals, but it
Speaker 1: did mean that, you know, you had a lot of
Speaker 1: different factors that could impact the quality or even the
Speaker 1: ability to receive television. It was pretty limited in power
Speaker 1: and scope. Yeah, you had a certain number of stations
Speaker 1: that you could receive, and they were all regionally based.
Speaker 1: You know. There weren't really any national channels other than
Speaker 1: stuff that could be rebroadcast from one from one tower
Speaker 1: to another. And um and and really, I mean, the
Speaker 1: thing about the electromagnetic spectrum is that it's not infinite
Speaker 1: I mean it's it's you know, it's pretty wide, but
Speaker 1: there's only so many radio channels that you can broadcast
Speaker 1: on right exactly, And it's different in different countries, like
Speaker 1: in the United States. If you look at the spectrum
Speaker 1: from a transmission standpoint, you'll see that there are entire
Speaker 1: bandwidths that are set aside specifically for things like television broadcast,
Speaker 1: radio broadcast, and then there's a whole bunch of government ones. Anyway,
Speaker 1: you know, you have to play within that and you
Speaker 1: can't play within the same space that someone else is
Speaker 1: playing with within that area, or else you get a
Speaker 1: signal confusion. So h There were other problems with this approach,
Speaker 1: and one of them was that people who lived in
Speaker 1: remote areas often could not receive any sort of television programming,
Speaker 1: which can be a problem if you want to use
Speaker 1: TV to communicate something widely, or you just want to
Speaker 1: try and reach as many potential customers. If you are
Speaker 1: someone who's creating ads on this television platform. U So,
Speaker 1: what could you do? While in nineteen which this actually
Speaker 1: surprised me that was this early n you actually had
Speaker 1: a few companies begin to experiment with delivering broadcast channels
Speaker 1: with cable. They were using the instead of using it
Speaker 1: as a broadcast radio signal, they were putting these signals
Speaker 1: through copper wires essentially. And this was just a few
Speaker 1: small communities out in Oregon, Arkansas and Pennsylvania. Yeah, Pennsylvania
Speaker 1: I think might have even been the very first one.
Speaker 1: So you start seeing this experiment. Now, in this case,
Speaker 1: it's really the broadcast channels that are being put over
Speaker 1: the cable. It's not like suddenly everybody had HBO right
Speaker 1: right now, know, um, And you know that television production
Speaker 1: to begin with was very small at this point, and
Speaker 1: it was not twenty four hours of content. It was
Speaker 1: just a few shows that would air at peak times.
Speaker 1: And uh yeah, we're talking like the same source stuff
Speaker 1: you would be able to see if you had an
Speaker 1: antenna and could pick up the local stations. So nothing
Speaker 1: beyond that. In nineteen sixty we started to see cable
Speaker 1: began to enter major metropolitan area markets. So now it's
Speaker 1: no longer just a tool to get television out to
Speaker 1: remote areas. Now it's an alternative to broadcast TV, but
Speaker 1: it's still at this point was mostly covered carrying the
Speaker 1: local area networks. It wasn't like again, there weren't like
Speaker 1: these big national UH companies that spread from coast to
Speaker 1: coast right It in fact wouldn't be until an entire
Speaker 1: decade later in nineteen seventy that the first UH cable
Speaker 1: programming networks would begin to launch. Right now, this is
Speaker 1: where we start seeing. We have the big broadcast companies
Speaker 1: still like ABC, NBCCB, Yes those were those were well established.
Speaker 1: But this is when we start seeing the smaller cable
Speaker 1: companies that were independent of these big broadcast companies become
Speaker 1: an actual thing and be able to get a national reach.
Speaker 1: Now before, if you were to create your own channel,
Speaker 1: you would have to be able to muscle in on
Speaker 1: that broadcast spectrum we were talking about. UH. This way
Speaker 1: you could suddenly have lots more bandwidth to play with
Speaker 1: and you could create, you know, your crazy wacky channel company.
Speaker 1: And a lot of people tried it, and so nine two,
Speaker 1: one of the biggest ones debuted that would be HBO.
Speaker 1: There was no UM and it's a it was a
Speaker 1: subsidiary still is of of Time now it's Time Warner,
Speaker 1: but it's just Time Incorporated. Yep. And they purchased it
Speaker 1: might sel familiar what they would do. They would purchase
Speaker 1: rights to recent movies, and they would also purchase the
Speaker 1: right the broadcast rights to sporting events, and that was
Speaker 1: how they made their name. Back in nineteen seventy two, Uh,
Speaker 1: nineteen seventy six saw another interesting development in cable. That
Speaker 1: was when TBS became a superstation. TBS ends for Turner
Speaker 1: Broadcast Station and uh after Ted Turner, who is, Hey,
Speaker 1: he's a neighbor of ours here in Atlanta. I mean
Speaker 1: not not a direct neighbor. I mean he doesn't live
Speaker 1: in my neighborhood. No, no, no, he could own my neighborhood.
Speaker 1: Several times over. His restaurant is right down the street
Speaker 1: from where I live, one of them, Ted's Montana Grill. Anyway, Um, Turner,
Speaker 1: he had this idea. He had this station that he
Speaker 1: had he was producing that was mainly for the Atlanta area,
Speaker 1: the Turner Broadcast Station, and he thought, well, with cable,
Speaker 1: I could turn this local station into a national station.
Speaker 1: I could distribute this local programming across the entire United States.
Speaker 1: And this was the first time anyone had had tried this,
Speaker 1: and it was a big success. Turner had had seen
Speaker 1: great success with the Turner Broadcast Station and many other
Speaker 1: channels followed suit. In fact, I remember as a kid
Speaker 1: growing up being completely flabbergasted that we were getting a
Speaker 1: station out of Chicago and it was Chicago programming and
Speaker 1: everything was an hour off. And also I remember being
Speaker 1: very confused about that. As a child, I had never
Speaker 1: seen Bozo the Clown until we got that channel. And
Speaker 1: then I became a big fan of the Grand Prize Game.
Speaker 1: Uh so lots of stations started experimenting with that. By
Speaker 1: cable television had exploded. In fact, that's right about when
Speaker 1: my family got cable TV would have been nineteen eighty UM,
Speaker 1: and dozens and dozens of channels began to join this,
Speaker 1: this new revolution in entertainment and and delivery. So this
Speaker 1: is when you started getting things like m MTV. First
Speaker 1: video on MTV, of course, video Killed the Radio Star
Speaker 1: by the Buggles, um, and then um after let's go
Speaker 1: forward in a full decade. Cable through this decade does
Speaker 1: really really well. Ah yeah, seven percent of households in
Speaker 1: the US are subscribed to some kind of cable video service.
Speaker 1: Yeah yeah. And keep in mind that when we're talking
Speaker 1: about cable here will also later be talking about things
Speaker 1: like satellite television. Uh, cable almost becomes like a just
Speaker 1: kind of a general term meaning right right, it's a
Speaker 1: weirdly antiquated in some ways. Uh yeah, umbrella term I
Speaker 1: think for for media. At this point, we're going to
Speaker 1: be using it mostly as shorthand meaning both cable and
Speaker 1: satellite when we get toward the discussion of cord cutting,
Speaker 1: just because saying cable and satellite over and over it
Speaker 1: gets a little tedious. Yeah, it would make our episode
Speaker 1: even longer. Yeah, and we heard your cries people two
Speaker 1: thousand one, actually mostly I hear our producer cry. In
Speaker 1: two thousand one, the average pay TV cable monthly bill
Speaker 1: in the United States was forty dollars sots. Yeah, we'll
Speaker 1: get into why that sounds lovely and a little bit.
Speaker 1: For those of you who actually are in charge of
Speaker 1: your cable bill, you already know why forty dollars a
Speaker 1: month sounds lovely. Uh. From two thousand and eight through
Speaker 1: two thousand eleven, this is a period that I wanted
Speaker 1: to talk about because, according to the Convergence Consulting Group,
Speaker 1: around two point six five million people in the United
Speaker 1: States dropped cable TV entirely. They just they stopped subscribing.
Speaker 1: They canceled their subscriptions, meaning that they also didn't go
Speaker 1: to satellite. They got rid of any sort of provider
Speaker 1: from that side. And we call this cutting the chord.
Speaker 1: Chord cutting where you're you're no longer getting your entertainment
Speaker 1: through these channels or these platforms is so confusing. The
Speaker 1: terminology here, by the way, is pretty tough because a
Speaker 1: lot of the words we want to use mean multiple
Speaker 1: multiple things. But anyway, the idea is that they go
Speaker 1: mainly either to the Internet for all their entertainment, or
Speaker 1: they don't know, go outside or something. I don't understand
Speaker 1: these people, honestly, But two point six five million people
Speaker 1: and now that might sound like a lot, but you're
Speaker 1: talking about lots and lots and lots of customers. Now.
Speaker 1: According to Nielsen, one point five million customers dropped multi
Speaker 1: channel subscriptions in twenty eleven alone. So if you think
Speaker 1: two thousand and eight to two thousand eleven, two point
Speaker 1: six five million of them dropped cable. If two thousand
Speaker 1: eleven one point five million of them did, that means
Speaker 1: more than half of that number dropped in twenty eleven,
Speaker 1: which could possibly mean we're seeing a trend that is
Speaker 1: on a very rapid climb right right. According to the
Speaker 1: Wall Street Journal, um was the peak of cable subscription
Speaker 1: cable subscribers actual the United States, and since since then
Speaker 1: it has been in in even more steep decline than
Speaker 1: this initial period of broadband affecting things right, right, And
Speaker 1: we should point out that if you look at the numbers,
Speaker 1: if you look at the full numbers of cable subscription,
Speaker 1: which is tough to do, by the way, you have
Speaker 1: to rely on a lot of different consulting groups doing
Speaker 1: their own work, because uh, it's it's not easy to
Speaker 1: get all these numbers and make them meaningful. But in general,
Speaker 1: it looks like satellite has had modest growth, and by
Speaker 1: modest I mean like one point six percent growth, cable
Speaker 1: has suffered a minor decline like three point one percent,
Speaker 1: and Internet provided TV or Internet I p t V.
Speaker 1: I should say UH has had a significant increase at
Speaker 1: for over a two year period. But while that sounds big,
Speaker 1: the numbers themselves are actually small. It's it's big growth,
Speaker 1: but it's like a small group of users into a
Speaker 1: slightly less small group of users, right, So if you
Speaker 1: if you go from five people to ten people, that's
Speaker 1: huge growth. That's right. But if another company loses five
Speaker 1: customers when it has millions, like they're like, what, I
Speaker 1: did not notice that buzzing little sound in my ear?
Speaker 1: So anyway, complicated issue. We'll get more into that in
Speaker 1: the second half. Now, in at that peak of able subscription,
Speaker 1: when we're seeing all this stuff happen, the average pay
Speaker 1: TV cable monthly bill is now eighty six dollars per month.
Speaker 1: So in two thousand one it was forty, it's eighty six.
Speaker 1: So and to be fair, there has been a pretty
Speaker 1: steep inflation rate over that period of time. Yeah, yeah, yeah,
Speaker 1: it's not it's not just that the prices doubled or
Speaker 1: more than doubled. It's also inflation which caused caused however,
Speaker 1: that's that's I mean, it's you know, the inflation rates
Speaker 1: certainly didn't go up that much, right, that was still
Speaker 1: a pretty pretty sharp And two thousand and twelve, the
Speaker 1: National Cable and Telecommunications Association estimated that there fifty seven
Speaker 1: point nine million customers for cable video and forty six
Speaker 1: point four million for digital video, So cord cutters are
Speaker 1: about two point five percent of the entire TV viewing population,
Speaker 1: So two and a half a percent of your population
Speaker 1: decides to stop using the product. That's not that big
Speaker 1: a number in the grand scheme of things, or it's
Speaker 1: not that big of a person synage, I should say.
Speaker 1: But another survey found that nine of cable company customers
Speaker 1: had canceled service within the that previous year. So nine
Speaker 1: percent of the people they surveyed said that they had
Speaker 1: canceled their service. So so again the numbers are are
Speaker 1: kind of squiggly and complicated. In twelve, New York Times
Speaker 1: reported that there had been about a three percent per
Speaker 1: year decline and cable subscriptions for a while, right, And
Speaker 1: you know, some of that might mean that it's not
Speaker 1: just people canceling, but we'll we'll explain that in the
Speaker 1: second half. So twenty thirteen, that's this year we're recording this.
Speaker 1: In August two thousand thirteen, um Nielsen reported that in
Speaker 1: its fourth quarter two thousand twelve cross Platform report that
Speaker 1: there were more than five million households in the United
Speaker 1: States that fit its zero TV definition, which that definition
Speaker 1: meant that the households got entertainment not through television but
Speaker 1: through computers, smartphones, and tablets, and that in two thousand
Speaker 1: seven it was sorts of two million, so more than
Speaker 1: doubled within six years. Now. We should also point out
Speaker 1: that this is kind of a weird definition to say
Speaker 1: zero TV and that they only get their their their
Speaker 1: entertainment through computers, smartphones, and tablets, because there are lots
Speaker 1: of different solutions out there, set top boxes, for example,
Speaker 1: that are not getting cable or satellite. They're getting Internet content,
Speaker 1: but they are streaming television. Yeah, they're streaming to a
Speaker 1: television set. So I don't know if the zero TV
Speaker 1: definition takes into account those people. See I'm one of
Speaker 1: those people. I have, like you know, I have an
Speaker 1: Xbox three six which pulls in content. I've got a
Speaker 1: PlayStation three which pulls in content. I've got a Chrome
Speaker 1: cast that pulls in content. I've got Roku that pulls
Speaker 1: in content. Um, I got a lot of these devices, right, So,
Speaker 1: but I do watch the content on the television. So
Speaker 1: I don't know that, you know, if that definition doesn't uh,
Speaker 1: if I don't fall under the zero TV definition, there
Speaker 1: may be even more people than we're in this report
Speaker 1: that do not get their content through a cable or
Speaker 1: satellite provider. Other than they're the ones who provide the
Speaker 1: actual pipes that get the data there or tubes if
Speaker 1: you prefer, since that's what the and in two thousand fifteen,
Speaker 1: and I think, I know you're thinking, wait, whoa what
Speaker 1: two thousand fifteen, But it's not even yet there. There
Speaker 1: is an estimate, Yes, there's a prediction. The mp D
Speaker 1: group estimates that the average pay TV cable bill in
Speaker 1: two thousand fifteen will be and prepare yourselves for some
Speaker 1: sticker shock, a hundred and twenty three dollars per month.
Speaker 1: That's average, meaning that they're gonna be other packages out
Speaker 1: there that are going to be significantly more than that,
Speaker 1: and some that will be less than that three bucks
Speaker 1: per month. Yeah, so that's our timeline. But we've got
Speaker 1: a full discussion about cord cutting coming up, and before
Speaker 1: we do that, let's take a quick break to our sponsor. Okay,
Speaker 1: so we've covered kind of the timeline of cable and
Speaker 1: what's going on with this chord cutting trend. We should
Speaker 1: stress again this trend, if it is in fact a trend,
Speaker 1: is still in its earliest days, and in fact, there
Speaker 1: are a lot of factors that complicate the decision to
Speaker 1: just cut the chord, and it all will depend upon
Speaker 1: the individuals preferences like what what do they like to watch?
Speaker 1: Because some things, if you like certain things, you know,
Speaker 1: you need to have cable, you know, certain sporting events.
Speaker 1: That's a big one. Sports is like the biggest one
Speaker 1: because sports companies have very complicated television deals. And anyone
Speaker 1: who's tried to follow sports and has also looked at
Speaker 1: cutting the cable or cutting the chord has found out
Speaker 1: that this can get pretty complicated. Yeah. I've had a few,
Speaker 1: um international football fans who who soccer fans for US folks,
Speaker 1: um that that you have to gote like like, well,
Speaker 1: I can't I can't do this because this, Yeah, because
Speaker 1: then I can't see anything or you know, I I
Speaker 1: am a casual baseball fan. But the way that baseball
Speaker 1: agreements work on television and cable means that if I
Speaker 1: were to go with an online solution, like I I
Speaker 1: subscribe to Major League Baseball and get get games through there,
Speaker 1: there's still some agreements that say that if a game
Speaker 1: was to be shown in my local area, it cannot
Speaker 1: be shown on the internet, which means that if I
Speaker 1: don't have that access, then I don't see that game.
Speaker 1: So clearly sports is one of those things that if
Speaker 1: you're a big sports fan, there are really very few
Speaker 1: options that will satisfy you entirely. Not that there aren't
Speaker 1: options out there. There are a lot of them. They're
Speaker 1: just not gonna necessarily meet your needs. So let's talk
Speaker 1: more about this whole cord cutting cable subscription problem. So
Speaker 1: cable subscription growth has kind of wobbled, like we had said,
Speaker 1: it dips a couple of times, it's kind of held
Speaker 1: steady more less in about totally. If you're talking about
Speaker 1: pay TV subscriptions, not just cable, but pay TV subscriptions
Speaker 1: across all the providers are about a hundred point eight
Speaker 1: million customers. But the number of occupied households grew. Yeah,
Speaker 1: so you get one point to five million more households,
Speaker 1: but the actual subscription numbers stay steady. This tells you
Speaker 1: a couple of things. It tells you there's some combination
Speaker 1: of new households that are not subscribing to cable, or
Speaker 1: if all one point to five million people are subscribing
Speaker 1: to cable, that means you lost one point to five
Speaker 1: million existing customers because your numbers stayed the same. So
Speaker 1: there's some and there's it's more likely a combination right,
Speaker 1: there's some people who just said I don't need it,
Speaker 1: so I'm never going to get it, and there's some
Speaker 1: people who are like, I want it, and then some
Speaker 1: existing customers saying I am not doing this anymore. So
Speaker 1: the with the numbers staying steady, that's you know, everyone
Speaker 1: wants to see growth when they're in a business. They
Speaker 1: want growth year over year, and they want that rate
Speaker 1: of growth to grow in turned. So, now, according to
Speaker 1: the Multi Media Research Group, there are about eighty four
Speaker 1: point five million pay TV subscribers in the United States
Speaker 1: in and cable accounts for forty eight point seven of
Speaker 1: that number. Satellite was another forty point four percent, and
Speaker 1: then you have I p t V, which was ten
Speaker 1: pot nine. Now, like we said, out of all of
Speaker 1: those three, ib TV had the biggest amount of growth,
Speaker 1: but it was also the smallest number of customers. Right,
Speaker 1: So really, you know, a significant growth for ip TV
Speaker 1: would be insignificant for cable or satellite, is what we're saying,
Speaker 1: because just because of the numbers game and boy aren't
Speaker 1: percentages fun And we don't really know a lot about
Speaker 1: people who just don't ever subscribe to cable, Like there
Speaker 1: there's a generation now that's entering into their first living
Speaker 1: away from home. That ver so the millennia alls and younger. Yeah. Yeah.
Speaker 1: Charlie Organ, who's the chairman co founder of the Dish Network.
Speaker 1: At UM the Dive into Media conference, which is a
Speaker 1: big executive kind of thing that happens every year, was
Speaker 1: talking about, um, you know, the fact that that college
Speaker 1: kids don't subscribe to cable packages when they're in college
Speaker 1: because they've got broadband at school and cable is expensive,
Speaker 1: and then they're getting out into maybe the workforce or
Speaker 1: maybe they're having trouble and they're continue and that they're
Speaker 1: just never going to buy it. He joked, there's a
Speaker 1: reason that tobacco companies giveaway free cigarettes at colleges. Wow,
Speaker 1: what a great joke. Boy. I sure wish I had
Speaker 1: said something like that to be recorded for all time
Speaker 1: on the internet. He said sarcastically. Um, yeah, so we
Speaker 1: don't really know how many people don't subscribe, because I mean,
Speaker 1: these these are numbers that don't tend to get counted
Speaker 1: in surveys. Yet again, it's difficult to record something not happening.
Speaker 1: But if it does mean that there are more and
Speaker 1: more people who are never becoming so subscribers either to
Speaker 1: cable or IPTV or SATURDAYLA or whatever, and they're just
Speaker 1: relying on other services, things like the streaming services will
Speaker 1: talk about in our companion piece, or just you know,
Speaker 1: anything that they can get online. If if that's a
Speaker 1: growing trend, that's bad news for providers, all right, especially
Speaker 1: because over this period of time, broadband subscriptions, you know,
Speaker 1: people who are who are purchasing plans to get broadband
Speaker 1: into their home are on the rise. Yeah. Yeah, the
Speaker 1: cable television portion of it is in decline. So there
Speaker 1: is some worry within the cable industry, particularly in the
Speaker 1: cable providers and satellite providers, that what they are going
Speaker 1: to end up being will be don't what they call
Speaker 1: dumb pipes, meaning that they'll just they'll just provide that
Speaker 1: connection that Internet connections, So you'll still subscribe to have
Speaker 1: the Internet connection, you'll still subscribe for a monthly plan
Speaker 1: on that. But that would be what the cable companies
Speaker 1: could turn into. If you're looking well into the future
Speaker 1: and assuming that these trends are one reel and two
Speaker 1: going to continue, which by the way, is still really early,
Speaker 1: and there are a lot of things that cable companies
Speaker 1: can do to either address this issue or at least
Speaker 1: make it last longer. Huh. And we'll talk about a
Speaker 1: little bit of that, but uh, we don't know what's
Speaker 1: how it's going to turn out. So I know a
Speaker 1: lot of people kind of have this foregone conclusion that
Speaker 1: cable companies are are on the way out. It's just
Speaker 1: a matter of time. People for the past four years
Speaker 1: have been saying it is the end of television as
Speaker 1: we know it, and that gets complicated, I mean, because
Speaker 1: when you're talking about this whole system going away, it
Speaker 1: changes everything about the entertainment industry and the television industry
Speaker 1: and the way that all of these contracts are drawn
Speaker 1: up and where the money goes and who gets how
Speaker 1: much of it right, and whether or not we ever
Speaker 1: get another awesome, well produced television series or if everything
Speaker 1: has to become something on the cheap because suddenly the
Speaker 1: money that would be going into the system and providing
Speaker 1: the ability to produce this content suddenly goes away. Um,
Speaker 1: So let's talk a little bit about where this, this whole,
Speaker 1: this whole process comes from, Like what is going on
Speaker 1: with cable, What is going on with the content that
Speaker 1: comes to you the viewer when you turn on your television,
Speaker 1: and what is it that's driving the changes for people
Speaker 1: to make these choices to cut the cord. Now, Uh,
Speaker 1: let's talk about the different groups involved. First of all,
Speaker 1: when you're talking about television show, like a specific show, Um,
Speaker 1: I don't know, I'll pick Supernatural because I haven't talked
Speaker 1: about it in like fourteen or fifteen episodes. So Supernatural,
Speaker 1: You've got the company that actually makes the show, the
Speaker 1: content creators, all right, they have entered into a deal
Speaker 1: with a particular channel, whatever channel it is that runs Supernatural,
Speaker 1: which I honestly don't know because I get it on.
Speaker 1: I think it's the c W. Yeah, so the c W.
Speaker 1: So you've got the the show that then has the
Speaker 1: relationship with the c W. C W is paying essentially
Speaker 1: to have this show on its channel. Then you've got
Speaker 1: the cable company. So in this case, i'll talk about Comcast.
Speaker 1: It is a service provider, Yeah, it is. It is
Speaker 1: what sends the tubes into your home. Right, So Comcast says, hey,
Speaker 1: I want to have the c W as part of
Speaker 1: my my library of channels. Yeah, the package of channels
Speaker 1: that I offer my subscribers. And so then uh, the
Speaker 1: cable provider will pay a certain amount of carriage fees
Speaker 1: usually is what we call this, to carry that channel
Speaker 1: into its package. And then you've got the actual customer,
Speaker 1: the person on the other end who's paying a subscription
Speaker 1: to have access to all of this. Where this gets
Speaker 1: really complicated is when you start talking about big, big
Speaker 1: companies that own lots and lots of channels. So for example,
Speaker 1: Viacom owns many different channels, MTV Nickelodeon, MTV two, MTV seventeen,
Speaker 1: or or Disney's entire ABC, ESPN, Disney channels. So you've
Speaker 1: got these different giant companies that own multiple channels, and
Speaker 1: what they'll do is they'll do something called bundling where
Speaker 1: they bundle these channels together in a single package and
Speaker 1: say when the cable company comes up to them and
Speaker 1: say to Disney, for example, and says, hey, Disney, we
Speaker 1: want ESPN. We have to have ESPN in our package
Speaker 1: because otherwise no one's going to buy it, Disney can say,
Speaker 1: all right, but you also have to take ABC Family,
Speaker 1: and you have to take Disney Channel, and you have
Speaker 1: to you have to pay for all those or you
Speaker 1: don't get ESPN. They all get bundled together. So this
Speaker 1: sort of arrangement allows big, big companies to do things
Speaker 1: like not only get money for channels that might be
Speaker 1: a hard sell otherwise, which which can be great for
Speaker 1: the content creators at the end of the day, and
Speaker 1: it could be great for the audience too, and maybe
Speaker 1: that there's a very small audience that tunes into that channel,
Speaker 1: but they may find the programming on that channel to
Speaker 1: be exactly what they want. Or if you ever hit
Speaker 1: that station randomly in the nine two channels they have
Speaker 1: to have, you might find something new that you like exactly.
Speaker 1: So it's not we're not saying that the channels that
Speaker 1: are generally speaking, you know that that perform at a
Speaker 1: lower rate, are necessarily worse. They're not. They're not. There's
Speaker 1: nothing about that that makes them better or worse than
Speaker 1: any other channel. It's just popularity. It is an individual
Speaker 1: decision which becomes a non individual decision because of the
Speaker 1: way that these cable companies are bundling these packages. Right,
Speaker 1: So you've got these big bundles, and so a cable company,
Speaker 1: a cable provider, not the not the mega corporations that
Speaker 1: own all the channels, but a company like Comcast takes
Speaker 1: a look and says, well, you know, I'll go ahead
Speaker 1: and pay for this big bundle of channels because I
Speaker 1: want this one or two channels that are really popular
Speaker 1: for my subscribers. I'll pass the cost onto the subscribers,
Speaker 1: so that will help determine how much the monthly bill is.
Speaker 1: And then you, as a subscriber to get your monthly bill.
Speaker 1: And you think, I don't even watch half these channels,
Speaker 1: or even of these channels, I never watch any of them.
Speaker 1: Why am I paying for all these channels? Well, the
Speaker 1: reason you're paying is because these mega companies that own
Speaker 1: multiple channels are saying this is the only way we're
Speaker 1: gonna play. So that's a complicated business side of the
Speaker 1: cable industry. Now we'll talk about reasons why people want
Speaker 1: to cut chords. Part of it. We've just addressed this
Speaker 1: idea of I don't want to pay for that. Why
Speaker 1: don't I just pay for the things I like? Why
Speaker 1: don't you create a cable plan where I can pick
Speaker 1: specifically which channels I like, and I will pay that.
Speaker 1: And if you make the bill so that it makes
Speaker 1: sense compared to how many channels I want, like you
Speaker 1: might say I want one local Channel, I want Comedy Central,
Speaker 1: I want Sci Fi, and I want h Discovery And
Speaker 1: then you're like, those are the channels I want and
Speaker 1: that's it. Well, then you know you would expect the
Speaker 1: bill to be different than if you were to get
Speaker 1: a big package with five channels. The problem is, because
Speaker 1: of this bundle deal, there's no incentive really for the
Speaker 1: big company needs to do this. I mean it would
Speaker 1: mean that it would mean that other channels would suffer.
Speaker 1: And like we said, there are there's plenty of good
Speaker 1: programming out there that you just might not be interested in.
Speaker 1: It's just not your thing. But if they are not
Speaker 1: bundled with the big channels, that they might fail and
Speaker 1: they might not be able to to fund the creation
Speaker 1: of these programs, right. And then if you're talking about
Speaker 1: a drop in the amount of revenue that goes to
Speaker 1: the channels themselves, the people who are funding the creation
Speaker 1: of this content, then you don't have money to produce
Speaker 1: the content, right exactly. So it's really complicated. You can't
Speaker 1: just say let's go ala carte, because if we were
Speaker 1: to try that, let's say that tomorrow everyone decided that
Speaker 1: a la carte is the way to go, you would
Speaker 1: rapidly see a lot of shows die off or at
Speaker 1: least have their production values cut severely. It would it
Speaker 1: would be an extinction level event in the industry. It
Speaker 1: would be a huge shake up. It would be crazy.
Speaker 1: But yeah, it would be tough. I mean it would
Speaker 1: be as as a consumer, that's the thing that sounds
Speaker 1: like it makes the most sense to me, right as
Speaker 1: a consumer. As a consumer, you can totally see the
Speaker 1: benefit to you from from the side of I get
Speaker 1: what I pay for. From the creative incorporate standpoint, of course,
Speaker 1: I understand why they why they want to, you know,
Speaker 1: continue creating what they're creating. Right. And another another reason
Speaker 1: a lot of people are looking at cord cutting is
Speaker 1: this concept of time shifting. Now, time shifting is something
Speaker 1: it means that you're watching a program when you want
Speaker 1: to as opposed to win the program airs right, right,
Speaker 1: The DVR is becoming a you know, big enough storage
Speaker 1: capacity wise not in size um and uh well yeah,
Speaker 1: I mean like and be cheap enough. Right. This the
Speaker 1: start with the VCR obviously, but then the DVR made
Speaker 1: it much easier and now has incorporated into a lot
Speaker 1: of cable companies and satellite companies equipment where you can
Speaker 1: have DVRs as part of the actual cable box. But
Speaker 1: beyond that, there are now services out there where you
Speaker 1: can get access to more than just the last episode
Speaker 1: or the last three episodes you might be able to
Speaker 1: get assuming that you remembered to hit record and that
Speaker 1: nothing wiggy happen VR and etcetera, etcetera. With these other services,
Speaker 1: you can see the last like five seasons of a show.
Speaker 1: And it's that kind of freedom that also gets people saying,
Speaker 1: why do I need to have a cable subscription if
Speaker 1: I have access to all of this now? The answer
Speaker 1: to that, I would argue, is that you want access
Speaker 1: to the most recent material, which is not always possible online.
Speaker 1: And uh, if you are a bunch around a bunch
Speaker 1: of chatter boxes like I am all the time, something's
Speaker 1: gonna get spoiled. And seriously, people, you have to wait
Speaker 1: until Tuesday morning before you can talk about breaking bad
Speaker 1: because I watched that episode the day after it airs,
Speaker 1: all right, that's just me? Okay. So anyway, the time
Speaker 1: shift and the the idea of this ala carta the
Speaker 1: two big things that a lot of people really really want.
Speaker 1: They also want accessibility across multiple devices. That's the other
Speaker 1: big thing. Sure, sure, because you're not always you're not
Speaker 1: always in front of your television. You want to be
Speaker 1: able to watch it on your laptop or on your
Speaker 1: iPad or etcetera. Right, Right, So, getting back to that
Speaker 1: whole bundling thing, not everybody is a big fan of that,
Speaker 1: including some of the cable providers. For example, Cable Vision
Speaker 1: filed a lawsuit against Viacom because Cable Vision was objecting
Speaker 1: to being forced to pay for channels that very few
Speaker 1: subscribers ever watched, but they were being forced to pay
Speaker 1: for for them because Viacom said, if you want MTV
Speaker 1: and Nickelodeon, then you also have to take all these
Speaker 1: other channels. And uh so Cable Vision has filed a lawsuit.
Speaker 1: That lawsuit is still that was filed in early that's
Speaker 1: that's not been resolved yet as the recording of this podcast. So,
Speaker 1: uh yeah, this is something that we're still starting to
Speaker 1: see unravel even within the industry itself, beyond just the
Speaker 1: consumer level, where you've got customers saying I'm tired of
Speaker 1: having this experience of paying for stuff I don't use.
Speaker 1: So you know, we've we've kind of wrapped up that's
Speaker 1: that's sort of where we are today industry. Yeah. So,
Speaker 1: like I said, there there are certain things in the
Speaker 1: cable industry that I certainly find very frustrating as a consumer.
Speaker 1: I don't necessarily think that all cable companies are trying
Speaker 1: something really innovative. A lot of them are just kind
Speaker 1: of attempting to force the way things were into a new,
Speaker 1: a new world, and it doesn't It's it's like trying
Speaker 1: to fit a square a square peg in a round hole.
Speaker 1: But that being said, I know that there are a
Speaker 1: lot of companies out there that are looking into different
Speaker 1: ways of creating content and distributing content, some of which
Speaker 1: are creating, you know, backing some of the streaming services,
Speaker 1: but a lot of individual channels will also um air
Speaker 1: their shows online streaming on you know, like like MTV
Speaker 1: site has a lot of MTV s shows right right,
Speaker 1: and and you know, again, as a consumer, that can
Speaker 1: get a little frustrating because I know a lot of
Speaker 1: consumers just want to be able to go to one
Speaker 1: place and get all the stuff that they want. I
Speaker 1: don't think that world is ever going to be not
Speaker 1: a near future, yeah, it's all I think it's always
Speaker 1: going to be that you're going to have to pick
Speaker 1: and choose which services you subscribe to in order to
Speaker 1: get specific tie of material. There's gonna be a lot
Speaker 1: of overlap, but there's also gonna be some some areas
Speaker 1: outside that ven diagram that you are not gonna be
Speaker 1: able to access unless you subscribe to multiple services. So
Speaker 1: that wraps up this discussion. Guys, let us know what
Speaker 1: you think. Are you big cable people? What do you enjoy?
Speaker 1: Tell us we're curious to know, and if you have
Speaker 1: any suggestions for future episodes of tech Stuff, let's know
Speaker 1: that too. You can drop us the line on our email,
Speaker 1: our addresses, let's see it's a tech stuff at Discovery
Speaker 1: dot com, right fantastic, Or you can drop us a
Speaker 1: line on Facebook or Twitter or handles tech Stuff H. S. W.
Speaker 1: Lauren and I will talk to you again really soon
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