Cord Cutting Is for Freaks, Not Most Americans

NEW YORK (TheStreet) -- Last week, TheStreet's Leon Lazaroff published a pair of articles that perfectly channel the anger much of America feels toward cable and satellite companies as well as big media conglomerates.

In Time Warner Cable ( TWC) Are You Listening? Cord-Cutting is Coming and Sick and Tired of the Cable-TV Bundle: Media Reader Mail, Leon does a nice job setting the most socially-acceptable scene:
Cable is a rip-off. We're tired of paying for channels we don't watch. We're even more sick of squabbles between cable companies and content providers. And we've had it so up to here that we're ready to cut the cord.

Whenever a high-profile dispute, such as the one that was resolved Monday between Time Warner Cable and CBS ( CBS) lasts longer than a half-hour, the rhetoric ratchets up.

It's the perfect opportunity for consumers to complain about being screwed by fat cats who limo in and out of Midtown Manhattan office buildings. It also opens the window for you to call your cable or satellite provider, threaten to cancel and receive a bill credit, comp movie or discounted (or free) NFL Sunday Ticket (I have heard DirecTV ( DTV) gives in to this extent regularly). Plus, it adds fuel to the fire for every media and/or tech journalist east of the Pacific shore to overhype the notion of cord-cutting.

Even as Lazaroff notes, via a researcher he interviewed, that "We are years away from pay-TV being meaningfully challenged" by the still-minuscule cord-cutting puddle, he, like so many others, overstates the threat. Like most arguments that involve Netflix ( NFLX), there's an incredibly one-sided story being told. Or at least many very rational "other" sides being ignored, discounted or glossed over.

When we rant about the cost of cable and frantically claim we'll cut the cord, we poo poo so much, including another portion of Lazaroff's piece that actually gets to the heart of the matter:
How quickly and in what numbers people decide to cut the cord is anyone's guess ... (but) in an era of $4 gasoline paying $100 a month for watching TV, something most households do for five hours a day, is hardly the first expense families are looking to cut during times of belt-tightening.

Exactly. Because, despite all the hemming and hawing about the cost and structure of cable packages, they're a damn good deal, even for the cash-strapped. Riffs to the contrary amount to little more than misplaced anger.

Where's the outrage toward movie theater operators such as Regal Entertainment Group ( RGC)? Go run the numbers on a family of four making a day or night of it at the movies? Without loser tricks such as seeing the 11:00 a.m. show, sneaking in a bag of bulk sweets and nuts from the grocery store or finding free street parking, a family of four is easily in for around a hundred bucks.

What's more outrageous -- a 200% markup on snacks or the notion that you can watch ESPN all day, every day -- live college and pro football, live Major League Baseball, etc. etc. -- but have to pay for the relatively useless ESPNU and, if you don't have kids or a crush on Bridgit Mendler, Disney Channel? It sure as heck isn't the latter because, when you stop and think about it, cable television provides, far and away, the best bang for your entertainment buck.

Nothing else even comes close.

Cord-cutting households are no different than those odd families we all grew up with who never had a television set. In a sea of red-blooded Americans, they're well-meaning freaks. That's not a bad thing. Personally, I don't watch much television, but there's no way I could access what I do watch without a cable subscription (I actually use DirecTV) and, more importantly, at a better value than the $150 or so they get me for each month.

Is it the best possible situation? Probably not. But there are so many other unjust fish to fry beyond the perceived high cost of cable television. Plus no viable alternatives exist for a majority of Americans, at the right cumulative price. Giving up cable used to mean giving up television. Now, it simply means settling for less. And juggling X number of subscriptions, log-ins and potentially pieces of hardware.

That said, there's plenty to be sorted out over the next decade. And despite the popular meme among critics, it will be the big media executives at companies such as DTV, TWC, CBS, Disney ( DIS) and Time Warner ( TWX) who dictate both the pace and direction of the game. They're not sitting in their offices and Upper West Side townhouses shivering over the apparent Netflix threat. Instead, they're not-so-quietly innovating when they're not being interrupted by Reed Hastings begging for access to their best -- and, ultimately, unobtainable -- content.

Put another way -- when the cord gets cut en masse, calling it "cord cutting" will be little more than a symbolic and easy way of explaining what happened. Because the traditional delivery systems and major content owners will still be in charge, even if operating under new digitally-focused business models.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

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