The disruption of traditional television – Cord-cutting is growing

The disruption of traditional television – Cord-cutting is growing

Posted by Torben Rick | January 13, 2013 | Strategy
disruption of traditional television

Cord-cutting is coming to the TV industry

Disruption is coming to the TV industry and there will be a new set of distributors leveraging fundamentally different cost structures to the old regime.

Now, I am not one to argue that TV is going away. But for millions of TV users fed up with outrageous fees provided to cable services provider (COX, Time Warner, Comcast, YouSee etc.) streaming services like Netflix, Hulu Plus, HBO Nordic are slowly becoming “good enough” alternative and roughly 1/3rd the cost of basic cable. The phenomenon is called “Cord-cutting” and has been a growing trend since Netflix liberated the common user from traditional cable services.

This is the essence of what I call “disruptive change.” It’s transformed a number of industries and is starting to do the same in the world of television.

The disruption of traditional television - Cord-cutting is growing

The next platform in technology to host significant changes

The television could be the next platform in technology to host significant changes in the coming year. Tech giants like Intel, Apple, and LG are poised to bring about the TV revolution as streaming services and internet-based TV-watching grow in popularity, and high-quality sets reach the market.

The question though, is just how fast this disruption will take place and what form it will take. This kind of innovation makes it easy to think that the days of cable services providers are numbered. The thinking goes that if traditional media companies don’t embrace consumer demands for unbundled content and offer direct, a-la carte pricing these new entrants will simply replace them.

The same phenomenon occurred with mobile vs. fixed telephony

For several years it seemed that mobile was sustaining to fixed or that fixed was immune due to lock-ins. The fixed telephone incumbents insisted that the data was inconclusive. Then the trickle of abandonment turned into a deluge. The quality of service for mobile kept increasing and, with data, it became clear that the mobile devices could unleash unfathomable functionality and value.

And so it goes. A business dies first slowly then quickly.

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About The Author

Torben Rick

Experienced senior executive, both at a strategic and operational level, with strong track record in developing, driving and managing business improvement, development and change management. International experience from management positions in Denmark, Germany and Switzerland.

Blog Comments

When I got my first apartment back in 2000, I called the local ISP to get connected to the internet, but never bothered calling the local cable TV provider. Netflix wasn’t around at the time, and 56K dialup was still the best most Americans could get. Instead of watching TV I played video games or watched movies on DVD.

Once I had access to broadband over cable, I would tell cable providers bent on bundling cable internet with cable TV: “No. I don’t need cable TV. The internet has better porn.” I said it mainly to annoy people who annoyed me by giving me the hard sell, but services like Netflix have only cemented cable TV’s irrelevance.

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