Cord cutting is a phenomenon – but it’s not one that is well understood. The media has a bad habit of representing cord cutting as an enemy of live TV. Citing on-demand streaming services and a changing advertising revenue landscape, some observers want us to view cord cutting as a war between on-demand content subscriptions and all forms of live television.
But that’s not really what cord cutting is about, and it never was. People don’t make the decision to cut the cord because they dislike live TV – they do it because they dislike pay TV. Cord cutters enjoy live TV just like everyone else. It’s easy to see this when we look at the rising number of cord cutters who use antennas to get live TV free over the air.
We can also see cord cutters’ love of live TV in the rise of live TV OTT services like Sling TV and Playstation Vue. These “skinny bundle” services are looking to bring live TV back to the cord cutting set by streaming channels over the internet and reducing the price tags that had so many of us running from cable companies in the first place. But they’re missing something pretty crucial about that experience.
Here’s the curious thing about these new “skinny bundle” services: they all lack the four most important live TV networks in the United States. Over-the-air broadcasts are still a better option than paid OTT services for fans of the four major networks.
When we say “the four major networks” we’re talking, of course, about ABC, CBS, FOX, and NBC. Those are the “big four” networks, the traditional titans of cable television. All four of them are available over the air for free, yet none of them have signed a deal with a live OTT service.
That’s a problem for live OTT services, and a huge advantage for antenna companies. While it’s true that cord cutters want skinny bundles, even the smallest cable pay TV packages offer the four major networks. That’s not the case with even the largest OTT solutions. Playstation Vue offers a limited amount of major-network content on demand, but that’s it. No independent OTT service offers live streaming of the major networks.
Why? Well, there are lots of factors at play here.
Major networks air local news, which means that at certain times of the day they’ll be broadcasting totally different programs in totally different areas. That’s easy enough for OTA to handle, since each local station broadcasts its own signal. But how would OTT services handle that? Would they black the channel out during local broadcast hours? Would they attempt to deliver local content based on viewers’ IP addresses?
Another reason: several major networks have their own OTT services. CBS has CBS All Access, NBC has the comedy-only Seeso, and so on. There’s an inherent conflict, then, in any of them selling their content to competing OTT services.
And from an OTT service’s perspective, inking a deal with a major network like FOX or NBC is a much costlier proposition than signing, say, HGTV or IFC. Major network sitcoms and dramas are extremely valuable properties, and adding them to an OTT service wouldn’t be cheap.
That last point may be the most interesting of all, because it illustrates just how much OTA is dominating OTT in major network coverage. The disproportionate cost of major network deals would make it hard for an OTT service to stream a major network and still keep their offerings cost-effective. But OTA is, of course, free. No matter how efficient an OTT service could be in offering major networks on paid plans, they’d have trouble competing with antenna companies for the attentions of major network fans.
After all, why would anyone pay extra for a major network when they can watch the same channel with an antenna for free?
This is a guest post by Stephen Lovely. Stephen is the lead writer at Cordcutting.com, where he shares tips and news about OTT, OTA, and cord cutting in general. You can catch up on his latest writing by liking Cordcutting.com on Facebook and following @CordcuttingCom and @stephenlovely on Twitter.