Amid the champagne and excited chatter of a New Year's Eve party in San Francisco, 8:55pm rolled around. A friend eagerly suggested, "Let's watch the ball drop in Times Square!" The host apologetically stated, "I don't have live TV. I cut the cord a couple of years ago."
It's an all too familiar phrase in households around the country. For many Millennials, cable subscriptions have gone the way of landlines, prompting the sentiment of "Oh, I guess that would be nice, but is it worth the number of times I would actually use it?" Recent data from Neilsen indicates that traditional television (live and DVR) consumption among 25-34 year olds has decreased about 24% since 2011.
The term "cut the cord" incites a sense of liberation. What is it about unsubscribing from cable television that conjures the feeling of freedom? And from what exactly are we freeing ourselves? It's an amalgamation of factors, all of which originate from a feeling of unfairness. Freedom from subscribing to 150 channels, only to use 5 of them. Freedom from the notoriously difficult customer service. Freedom from a paying a hefty monthly fee to just watch your 3 favorite shows.
This sentiment isn't new. Aereo generated tremendous interest among venture capital firms, resulting in nearly $100mm raised albeit only 80,000 subscribers. Aereo was not only revolutionary for it's technology but for harnessing the frustration with the television status quo and addressing a demand for additional viewing options.
With numerous popular traditional TV shows on Netflix and Hulu along with the introduction of HBO Now, the migration to digital consumption is thriving. All of these outlets range from $7.99 to $14.99 per month, well below the cost of cable tv; costs are driven down further by sharing subscriptions among multiple people often in different locations on different devices.
Despite all of these alternatives, on certain occasions, nothing quite can rival live television. The New Years ball drop is just one instance; with the impending major sports events, such as the Super Bowl and this summer's Olympics in Rio De Janeiro, there will be increased demand to consume content in real time - to witness the game winning touchdown, to feel the tears of athletes who miss gold medals by hundredths of seconds, to experience the moment together - that solitary binge watching The Unbreakable Kimmy Schmidt just can't suppress.
And that's where the cable companies have the clear advantage - events where the value proposition for watching the event in real time is far stronger than seeing the highlight reel. But for how many people? And how long can cable companies hold this advantage?
As with all change, demand must be the impetus. Is the premium to watch live events strong enough to bind consumers to their cable providers? Will we force cable conglomerates to parse their offerings? Or will we do what we did on New Year's Eve? We simply shrugged at the fact that we couldn't watch the Times Square ball drop, and 3 hours later raised our glasses and gathered by the window to watch the fireworks over the Bay Bridge.
We knew it was midnight. No television needed.