HBO Insists Cord Cutters Don’t Exist, Current Cable Situation Will Last Forever

Senior Contributor
08.02.12 5 Comments

Cable is in trouble. Yes, cord cutters are undeniably a minority: Even cord-cutting advocates like me freely acknowledge that. It’s about 2.5% of people who watch television.

And HBO can afford to ignore them, for now, which is precisely what they’re doing. Jeff Bewkes has looked at the data and said as far as he’s concerned that cord-cutters basically don’t exist.

But the whole idea that there’s a lot of people out there that want to drop multichannel TV, and just have a Netflix or an HBO — that’s not right. Look for the data, you won’t find them.

And you know what? For him, statistically, he’s right. And he will be, right up until the whole rotten system collapses.But therein lies the problem: The entire rotten system is about to collapse.

Leaving aside the unique situation where government-granted monopolies allow companies like Comcast to thrive, the simple fact of the matter is that the current pay TV system is breaking down. Viacom’s recent spat with DirecTV and AMC’s troubles with Dish are just the latest in a long line of pissing matches between cable networks and cable systems. Time Warner just had one with a bunch of Hearst affiliates.

They’re going to become more common and they’re going to get worse and last longer. Cable subscriptions have stayed flat at 100 million or so but as we all know, the cost of cable TV goes up regularly.

That’s really the thing — Bewkes insists his market is people who haven’t signed up for HBO yet. The problem is, that market has not grown and if prices keep going up at some point it’s going to shrink. That’s just simple economics — beyond a certain price point, people start thinking “Eh, do I really need this?”

At the same time there’s technology pressure. America’s internet infrastructure is behind the times and it needs to be replaced. Google Fiber has come out of the frustration of the failure of companies such as Comcast and Verizon to spend what they need to upgrade their networks.

It’s worth noting that Bewkes isn’t unaware of this. After a bizarre back and forth when first content could only be rented and then only old content could be bought and then all HBO’s content was gone, suddenly most of HBO’s original content is available for sale on Amazon Instant Video. Bewkes is trying to strike a deal with Google Fiber. In other words, he knows cord-cutters exist. He’s just kind of hoping they go away.

image courtesy the Devil Saint on Flickr

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