1:37pm PT by Tim Goodman
Critic's Notebook: The Tipping Point for Cord-Cutting and the Streaming Revolution Has Come
Monday's announcement by Comcast that it would finally create a streaming service (not surprisingly using its NBCUniversal brand) was funny, flawed and insightful.
Funny, because even though it's precariously late in the game, it at least proves Comcast is trying to stop lying to itself about the future — a future that is unavoidable, like the steam train giving way to the jet airplane.
Flawed because even though it will have a non-commercial option, NBCUniversal seems most excited that it will be touting it as ad-supported (gah!) but free if you have a cable subscription (translation: not free), which is exactly what a cable company would get excited about.
And informative because, as the last major player into the streaming game, Comcast believes that the future will be one where consumers have a huge cable bill and then, you know, a bunch of other streaming bills, all while living in a world where they try to save money by watching five minutes of ads instead of buying another $10 subscription, thus paving the way for that "free" NBCUniversal streaming entry.
What kind of world would it be if we didn't have Comcast trying to turn an elephant into a monkey?
Listen, 2019 is going to be a huge year for consumers finally getting their shit together about cable vs. streaming. It will be slow, arduous and will probably bleed over into 2020 and slightly beyond before any real trends develop. Still, it's likely the revolution will be gaining exponentially before NBCUniversal even gets in the streaming game and, with a product 80 percent focused on people who already have cable, Comcast won't just be late to the house party — the house will be dark, shuttered and up for sale.
Which is the most Comcastic/Xfinityish thing ever, but also not the bigger point here.
The most important thing to come out of Monday's Comcast/NBCUniversal announcement is what it says about corporate thinking in the cable/network linear world and how businesses can be fraught with ill-conceived confidence when they think they've dodged a transformative, catastrophic moment in their particular marketplace.
NBCU CEO Steve Burke echoed ancient sentiments by telling The Hollywood Reporter's own Natalie Jarvey in a Q&A: "People talk about cutting the cord all the time, but about 80 percent of the homes in America subscribe to cable or satellite, so 80 percent of the universe would get this for free."
OK, forget about that "free" thing — he's always going to say that. But this notion that 80 percent of people have cable or satellite is where the trouble rests, because while Burke knows that the vast majority of Netflix, Amazon and Hulu subscribers are in that 80 percent, he also thinks they're going to stay there, in that percentage, still getting cable and satellite in the future while also subscribing to streaming services.
This is partly about economics, technology and confusion.
Let's use the train and jet analogy to illustrate the coming tipping point in the industry: If the people on a steam train could stick their heads out of its windows and look up at a jetliner, what would come to their minds (other than "WTF")? Probably some variation of: "That! Let's do that next time. How do we do that?"
Most people won't ride a train if they can fly somewhere, especially if the economics start to match the allure of the convenience, which is what happened in the travel industry.
But right now, at the very beginning of 2019 and on the consumer side of watching television, the economics — which are killing people, though not literally — is not the sticking point that comes before the tipping point. Confusion is.
People don't know how to cord-cut because it's confusing, they can't find the right combination and anyway it's too much hassle, even with all that damned economic pinching, because they've got their phones and their high-speed internet and their cable all bundled together and — laziness alert — who has time to untangle that?
So lots of people have ridiculous cable bills but get Netflix on top of that, and maybe Hulu and Amazon, too, (which they justify because of the free shipping they get on all that shopping they do).
If ever there was a bubble about to burst on an industry, it's that one.
Technology used to be the problem for streaming — bandwidth and speed were needed to avoid the dreaded pixilation, the lagging, stuttering, etc. That's pretty much a thing of the past. The tipping point now will be — and has been — making it easier to unbundle (cable, phone, internet). Nobody has mastered this. But you could make an argument that with Netflix so utterly dominant recently, there wasn't much economic urgency because people with debilitating cable bills and unwieldy bundles could still justify/rationalize Netflix — because it was Netflix.
People a little more economically advantaged could then add Hulu, or Amazon, or maybe even some fringier service. Otherwise, for the average American, a little extra for Netflix on top of cable was economically justifiable because nobody in the family could fix the problem at hand, or maybe wanted to — unbundling is a nightmare. Cancel cable? Take the satellite off the roof? How does one assemble a skinny bundle of streaming services? As family members holler about what they need — regional sports, HBO, live TV, at least 50 of the 500 channels they used to get — who takes on that challenge and comes up with a better solution and a total dollar amount that won't have discounts for keeping everything together?
The low numbers of complete cord-cutters and the most popular reasons cited by consumers for not cord-cutting bear this out.
But in 2019, consumers are going to get a spike in their streaming options: Disney+, Apple and WarnerMedia will be the big players (and there are plenty of others, incorporating sports, film, gaming, animation, etc.). Things may not tip completely over, this year, but there will be a shift in the balance, you watch.
All of the increased options will put pressure on actually finding a way to cord-cut. Never has the pressure to make a seismic technology and lifestyle change hit the industry quite like this will. Four, five or even six total streaming options that are damned alluring with must-have content will definitely change the equation.
Consumers outside of the industry know they want Disney+, and will probably want Apple because people always seem to want Apple (though the original TV content and how it's presented are of utmost importance), but don't sleep on consumers waking up to WarnerMedia, which they just might when they realize what's in the vault. At minimum, you've got three major players in 2019 begging to be streamed, adding on to Netflix, Amazon and Hulu. Is that resistible? Or will that finally make the unbundling hassle worth it?
History says the lure of the jet will win. Hulu content is getting better and Disney, now the majority owner, will beef up that originals budget plus show off the FX and Fox spoils it bought. Amazon is on an exceptional creative run and is expanding. Netflix is Netflix — and expanding. Disney+ will have Star Wars, Marvel, Pixar and one of the greatest vaults ever. WarnerMedia has, well, its own insanely deep Warner Bros. vault, plus HBO, Criterion, Harry Potter, the DC Universe, etc. Those are the quick hits, not the deep dives. There is value all over the place with those six services.
Some combination of those — hell, maybe all of them — with live TV, sports, a regional sports package and a smattering of really good cable channels, all in your streaming bundle and for less than your current cable bill, is not a pipe dream. People are waking up to that possibility. They are seeing ... the future.
Which brings us back around to Comcast/NBCUniversal, late to the game, convinced you'll stick with your onerous cable bill and gleefully accept a "free" streaming service sometime in 2020 or, because it's Comcast, 2021.
You might. Someone might. It's not like there's bad stuff in the NBCUniversal library. Most of it's elsewhere on someone else's platform currently and the plan to bring it back isn't clear, but forget that. Let's just focus on the plan. And the plan is ... inaction.
Welp, that's still working as of now. You can see how an old-school industry like cable would bet on that 80 percent number. Cable thinks it has survived the biggest streaming threat — Netflix. (But you know why that thinking is wrong now.) So one gigantic cable player, Comcast, has built this NBCUniversal streaming concept on the old tracks, for old times.
It — and all of cable and network linear television, for that matter — has put a bet on your confusion and/or laziness. You won't get off the train because the train is all you know.
But disruption is coming — sexy new streaming choices. Innovation is coming — scissors for those cords and bundles. The future is coming — because it always does. I'm going to bet on the jet.