Cord Cutting Debate Takes Center Stage at UBS Conference
NEW YORK -- If industry folks needed proof for just how concerned investors are that pay TV subscribers may indeed engage in "cord cutting" and swap their cable bills for free or cheap TV content via the Web, they didn't need to look further than a panel dedicated to the topic at the annual UBS media investor conference here on Monday.
The panel discussed so-called over-the-top video offerings by the likes of Netflix that some fear are starting to rival cable and satellite providers and whether cord cutting is real and here to stay, and it filled up so quickly that many interested people were left with a standing room only option.
Most came to hear from mavericks, such as HDNet founder and CEO Mark Cuban and Slingbox founder Blake Krikorian, who joined Roku vp of business development Jim Funk and Bloomberg global head of Web properties Kevin Krim as well as moderator Jason Hirschhorn, the former MySpace and Viacom top executive who recently was named to MGM's new board. Cuban said "Netflix has done a phenomenal job" and was brilliant in helping content companies monetize library videos. But he predicted that cable and satellite operators would increasingly pay for added content rights and build out their Web offerings, meaning that any cord cutting trend would be short-lived.
Krikorian agreed and said that the content companies would also help put the genie back in the bottle by ensuring there is no free content available online and all Web content gets authenticated, so as to make it available to pay TV subscribers only. But he blamed TV distributors for having failed to meet consumer needs.
Otherwise, Netflix and others "would never exist," he argued.
Cord cutting and Netflix also were dominant themes in other sessions on the opening day of the 38th annual UBS Global Media and Communications Conference.
Time Warner Cable chairman, president and CEO Glenn Britt told the audience that his team still "can't find any meaningful evidence of cord cutting...other than in very, very small numbers." And he argued that Netflix's online streaming service and other Web offers are more of a supplement to pay TV service than a substitute given that their content is "fairly thin" and "not that great."
CBS research chief David Poltrack also called cord cutting talk "overblown."
Walt Disney's ESPN in a new study that surfaced earlier on Monday also concluded that cord cutting is currently a "very minor" phenomenon. Time Warner chairman and CEO Jeff Bewkes had some of the clearest words of the day, saying that entertainment companies will in the future limit program deals with such low-priced online aggregators as Netflix to content that has pretty much run its course and made its money in previous release cycles.
Asked about a recent report that Netflix is looking to pay as much as $70,000-$100,000 per in-season episode of TV shows for streaming purposes, Bewkes said that would be "a measly little offer" that is "not attractive" given that content companies can get millions and millions in the various syndication cycles and on DVD.