Lackluster Content Choices May Hamstring Cable Cord-Cutting

October 21, 2014
By: Tara Seals

HBO and CBS both announced the development of their very own over-the-top (OTT) video services last week, setting many to wondering whether the cord-cutting—that is, the cancellation of traditional cable and satellite service—would start as a trickle or a flood.

But is combining a bunch of streaming services a rational approach to streamlining one’s entertainment experience?

ABC News and the Associated Press (News - Alert) took a look at things from a cost perspective, and totted up the monthly dues for Netflix ($8.99), Hulu (News - Alert) Plus ($7.99), CBS All Access ($5.99) and the expected price of HBO's service (about $15), and came up with $37.97, a figure that is roughly half of the average price of a traditional cable or satellite subscription (the FCC pegs it at $64.41).

However, let’s consider content. HBO will give a viewer, well, HBO. Enough said there. A subscriber would pay a premium for the service regardless of whether he or she takes a cable subscription or not.

Hulu has the closest thing to a traditional pay-TV content bouquet available, including current-season and past-season episodes of series from all major broadcasters: FOX, ABC, CBS, NBC and the CW; plus, cable channels like Comedy Central, Nickelodeon and Bravo.

CBS offers current-season fare for 15 network shows on-demand a day after they air, and live streaming in 14 markets. It also has some perks in the pipeline like 24-7 feeds of the Big Brother house when it kicks off again next summer.

It should be noted that rabbit ears can give a person free access to the same broadcast channels that Hulu and CBS offer, just on a linear basis—so the on-demand and catch-up TV aspects are really the differentiators for both.

And Netflix mostly offers and older content, except for its original series, like Orange (News - Alert) is the New Black, Arrested Development and House of Cards. 4K will also be part of the mix next year; but then, chances are good that if you own a 4K TV, you aren’t likely to be overly concerned with entertainment cost containment.

A key piece of all of this is that there are no sports involved—neither CBS nor Hulu offer network coverage of NFL games, for example, nor ESPN (News - Alert) content. So unless a sports fan is willing to hit the sports bar every time there’s a game on, this is probably a deal-breaker.

Taken together, the content—and lack thereof—can be a problem for OTT—and a boon for cable.

"The way things are priced, you won't be able to get more than four or five channels for less than your pay-TV bill now, and even getting two or three channels will be a significant portion of that bill," FBR analyst Barton Crockett told ABC News (which, incidentally, is owned by Disney (News - Alert) and is a sister channel to ESPN). "I think because of that there will be a strong incentive for people to sign up for a (cable) bundle."




Edited by Maurice Nagle