The five stages of grief begin with denial, and if Time Warner
CEO Jeff Bewkes is grieving the impending decline of cable
customers, that’s where he is in the process. According to paidContent, Bewkes said at an event in New York that he doesn’t see cord cutting as a serious threat to his industry.
Worse, he committed the familiar one-percenter blunder of trying to comment on the financial capabilities of middle- and low-income Americans and missing the mark. He said that cord cutters are limited to a small segment of low income Americans, which may technically be true but ignores completely the fact that even middle and upper-middle class people are increasingly looking at ways to whittle down their household budgets and see a plus-$100 monthly cable bill as problematic.
Time Warner's Bewkes
There are numerous options for piping top-notch entertainment into the home, including Netflix
, Hulu, and Amazon Prime Instant Video, not to mention the ability to stream many programs directly from network websites, and the overall cost is paltry compared to a cable subscription--even when you factor in the initial cost of a streaming device such as a Roku box, Xbox, or Blu-ray player.
For most people, there’s still no silver bullet--no combination of a la carte options that gets them everything they want (especially sports) without requiring cable or satellite. However, taking sports as an example, the temptation to ditch cable and take the extra money they save every month and instead go watch football at the bar with friends looms large.
Of course, when Bewkes stated that he doesn’t see services such as Netflix and Amazon as competitors because they’re distributors and not producers of high quality content (Time Warner actually owns lots of assets including HBO), he makes a great point--the fact that Netflix is working on original content
notwithstanding. Still, the paradigm of pay TV is woefully outdated; in an age when people can stream music and movies to their phones with the touch of a button (often for free), it seems downright bizarre to pay so much money for dozens if not hundreds of cable channels that you never watch.
Bewkes may be counting on the fact that behemoth media companies will maintain a strangehold on content and can therefore keep the Netflixes of the world in check, but as in every industry, that simply won’t be true forever. Hopefully Bewkes can speed through the middle stages of grief and find acceptance quickly.