Cut the cord. We all know what that means. It means cable TV companies became fat and rich and arrogant thanks to little competition, and they learned to charge their customers for everything while providing poor service.
Cutting the cord is not a new phenomenon but it has gained national attention and there is a clear trend toward jumping away from cable TV to something, anything else. Cable TV subscribers are going elsewhere, usually the internet, even though cable TV companies may still benefit by charging for bandwidth used. Where does Apple fit into the cutting the cord trend?
Cause And Effect
Apple did not cause the cut the cord revolution, but the company’s products have helped to facilitate the growth of an entire generation of TV watchers who don’t actually watch much TV in the traditional sense. In other words, they’ve cut the cord, and do not depend upon cable TV to supply their growing news, information, and entertainment needs.
Apple helped to push the cable cutting trend through iPhone, Apple TV, and iPad, not to mention providing TV shows and movies across the entire product platform. Today there’s a generational divide where those under 30 are less likely to have cable TV and instead depend upon the internet and their devices to keep them connected, informed, and entertained.
Those of us who do not fall into the millennials groups of generation X, Y, and Z may partake of the same devices, but we use them differently and still rely– though increasingly less so– on gathering news, information, and entertainment the old fashioned ways; TV, cable TV, radio, and newspapers.
Cutting the cord is a new phenomenon for a variety of reasons. Younger people do not mind multiple sources of content, especially mobile devices, while older generations just don’t like poor service and growing monthly expenses, especially when a cable TV company provides 300 TV channels, and most of us watch on a dozen or so. Yes, we’re paying for what we do not use. Younger generations don’t see the value so are not willing to pay the price, and instead, they’re content to become hunter gatherers with their mobile devices.
News of Apple mothballing its highly anticipated streaming television services should not have come as a surprise. Sure, we all want every TV show, every local news show, and every movie on demand with a click or a tap, but that’s not a reality even Apple can bring to humankind. It just won’t happen the way we expect. Instead, change to the TV industry will come as it has to other content and technology industries. Hard, fast, painful.
As millions of people leave the confines of cable TV– cord cutters all– the number of people subscribing will continue to drop. That impacts revenue and profits so cable TV companies will continued to nickel and dime their customers, adding fees wherever possible, and cutting services in a cause and effect death spiral that will only encourage more customers to abandon their sinking ship of fools.
Where does Apple stand in all of this? Unable to get into the industry, Apple still has an ace to play. Hardware. Content– whether news, information, entertainment, TV or the movie industry– needs distribution to survive and prosper. Apple can provide both through Mac, iPhone, Apple TV, iPad, even Watch (and certainly future devices). The question is not whether Apple will get involved in the new generation of content and distribution, but what part the company will play.
Amazon and Netflix are content distributors but also contribute to the industry through original content. AT&T and Verizon both want to be involved in content distribution and creation. Apple should be there, too, but there’s a problem in Cupertino.
Steve Jobs is dead.
Jobs was the lone executive who seemed to understand the value of creative content. His investment in and loyalty to Pixar shows us that Jobs understood that value (he made more riches from Pixar’s content than from Apple) and would know how to position Apple today to take greater advantage of the industry trend toward cable cutting and individual and personalized content selection. With few exceptions, Apple’s executives are engineers. Jony Ive is a designer. Phil Schiller is a marketing guy. Where is Apple’s visionary with a plan to disrupt the news, information, and entertainment industries?
If there is one, it’s not exactly visible these days.