Thoughts on Cord Cutting

My household recently stopped subscribing to traditional cable television in favor of contract-free streaming alternatives. Here are some thoughts.

Back in late 2007 I bought a Hauppauge TV capture card and used MythTV to capture and record television on a Linux-based computer. For a time the programming data was free, but eventually that community transitioned to a paid version as the free data was no longer available.

But TV circa 2008 was still the best TV has been for me, in terms of experience. Unfortunately, with the advent of HD, HDMI, and copy protection, that experience was no longer available. It’s a damned shame, and it has only strengthened my belief that the competition and copyright law have failed consumers. But now there are some bright spots with the advent of non-cable offerings.

We went with Roku to get the videos on the TVs. Roku seems to be the big name in third-party hardware. If the FCC hadn’t decided to can the rule changes to allow third-party cable boxes, who knows how much that market could have expanded (probably encompassing streaming video and providing a useful bridge for the market), but for now Roku seems like the best option. It’s not a company with outside focuses like hardware or retail, so, like Tivo, they should have an incentive to deliver a good, focused product without encumberments. But one hopes that more vendors and options will crop up to compete in this space.

The hardware itself works well. One caveat that wasn’t clear when we were setting up: you should consider making multiple Roku accounts for multiple devices. If you do not, they “mirror” each other so that apps installed on one Roku are available on the others. If you want customization on each one, you need separate accounts. (This is dumb, of course; Roku can and should let the users decide on account separation and device separation… separately.)

In terms of content-parity, we aren’t missing much, and what’s missing is owed to the tradeoff in price and usability rather than a market deficiency. Some of the cable channels want to continue to bundle and to charge higher prices, and some of the streaming services are looking to keep prices down. On the other hand, there’s still a bunch of sports and other content that we don’t care about but are still included. A la carte it is not, but given how long it took the market to get to this point, it’s one step at a time.

We’re saving a lot of money, too. That was the prime driver of our switch: the rates kept going up year-to-year, and we didn’t care to throw a tantrum just to see the price drop a little. The cable provider loses a dependable chunk of income because they couldn’t manage their pricing properly. The cable industry is regulated at the federal, state, and local level, and yet they regularly manage to rip people off. Talk about underregulation! Can I get an amen, my conservative brethren?!

In terms of user-interface, I wouldn’t say that the Roku is better. The apps on it are developed by the respective media companies or their contractors. They have their bright and dark spots. The cable box interface was always pretty bad, and none of them can touch MythTV circa 2008 in terms of utility, but they’re all more or less usable.

There’s an overemphasis on showing you posters rather than text, of arranging things in grids that don’t typewriter-cycle (i.e., don’t go from the top right item to the bottom left if you continue to go right past the end of the row). Some of the services have weird rules about watching things “live” (at broadcast time) rather than waiting a half-hour, or rules about fast-forwarding if you watch a “recording” after a certain period of time (because they want you to watch commercials?).

It’s all very absurdist, but cable television was, too.

The main benefit is price and the promise of increased competition that comes from the lack of a contract with any of the services. If the price starts rising on our current selections, we can change or drop them as needed. But choice is a factor, too. We may yet try some of the alternatives that have their own original content. For now we’re sticking with a pretty minimal option. There’s always something to watch, and there isn’t a lot of pressure to watch the next big thing.

How Unbundling Television Will Go

With HBO and CBS announcing plans for digital subscriptions, the future of television continues to look like people choosing what to watch rather than being corralled into overpriced packages. But there is a grave uncertainty in it. What if viewers trade one overpriced cable bill for a set of overpriced services?

The average cable bill is around $80. So that’s roughly four options at $20 each or eight at $10 or 16 at $5. But prices and content offerings will not be uniform. So you might pay $20 for a couple, then $5 for a couple.

But businesses want you to pay them more money. If a business is selling a package for $20, but you really only want one item from that package, eventually they’ll decide to sell it to you. How long will that take? They already do this through syndication. The whole business model of HBO is a secondary market. After the theater, before cable or network, the studios can rent it to HBO. Or Netflix, or whomever.

In all likelihood it will shake out to:

  1. Premium, first-run services
  2. Pay-per-episode and -per-season services
  3. Big-tent, tertiary-run services

So you might really want to see a lot of what one vendor puts out. You’ll buy their first-run service for $20. And then you might have a few shows from other creators that you want, but not enough for their service. There you’ll buy a season pass or the like. And then you’ll get a big-tent service to provide you with older content.

For first-run fiends with a heavy case of fear of losing out, the post-unbundling world will likely be about as expensive as it is now. It will be cheaper if you don’t watch a ton of content or are willing to wait. Will it be cheaper if you can stand to watch some advertisements?

Advertising is a big question mark. It will likely appear on the big-tents, at least at the lowest rung. It will probably be limited in pay-per setups. But it remains to be seen if it will show up in the premium services. The age of the DVR has tons of people just skipping over ads as it is. Why they bother with them when they’re easily skipped is unknown. Even if you couldn’t skip ads, the modern viewer can just pivot to checking a social feed while a muted ad plays on.

Another big question is in integration. Sure, with a streambox like many companies offer you can integrate multiple streaming services. But will the general purpose computer be stuck with separated apps and sites? Will a streambox App come that lets you integrate streams, or will that be blocked by streaming companies?

Unanswered questions aside, the new rules look a lot like old rules. Patience is a virtue, and can save you money on content. Fear of losing out is a losing strategy. Keep your friends close and your weapons loaded. Wait, that one’s for zombies. Maybe the biggest rule will be: there’s still very little content worth your time, no matter how cheap or how much content there is to choose from (with the caveats being that there’s more of it than you recognize, and you’re often wrong about what you want to view).

Content Programming Harms Content

Stagnant, mismanaged markets harm consumers. The broken video media market stands out as a broken marketplace. Relatively few competitors. Highly-coupled market components such as distribution with content makers make for less customer choice.

Tight-coupled markets mean decisions arise from the top or center rather than from the bottom or edges of the system. Akin to central planning, the oft-criticized anti-feature of most communist systems, decision concentration leads invariably to inefficiencies via poor decisions.

Content programming harms content. It arises from the market structure, and programming lead to poor decisions. The most criticized result of content programming comes in cable news. People lament the low quality of cable news content, while pointing to the need to fill “24 hours” as the cause (of course, it is not truly 24 hours, as the cable news networks show repeats overnight, excepting extraordinary breaking news).

But time-to-fill harm pales in comparison to the very notion of the timeslot. Timeslots arose from the radio and content programming there. A vestige of broadcasting, they filled the need to provide content over the limited resource of the airwaves. When broadcasting began on television, the limitation of the delivery medium continued to exist, as it did over cable television.

Advances mooted these limitations. Attention bottlenecks content delivery much more than distribution today. And yet content remains coupled to the timeslot, due to the broken market. So-called gluttonous viewing of content via video streaming services such as Netflix points to future erosion of the timeslot, but consumer expectations may keep it and its harm alive.

Many programs run longer than they need. This leads to filler content that weakens pacing and increases plot predictability. The occasional show runs shorter than it needs, leading to abbreviated or lost quality content (subplots and the like).

The same harms show out in the series or season model used for most television content. Shows may be cut short before their time due to the programmers’ incorrect expectations of popularity. Or they may run several years beyond their time due to the wish to reap as much profit from a once-popular, once-innovative show.

These things apply to the film industry as well. Sequels to movies that should never have been made, or shorts being turned into features when the short time serves their story better.

So-called webisodes also point to erosion of the programming norms. Free web-exclusive shows often arrive on irregular schedules and yet retain strong viewer bases. Discovering the true breadth of the actual video market will take years of erosion of the status quo. It may be that a certain amount of regular-release, traditional-length will remain, or in fifty years the only shows that come out at 22-to-30 minutes will be throwbacks and re-runs.

Just like storage media dominated by floppies helped limit the types of expressions of early computers, we’re certainly being limited by the current limits imposed by content programming.

Value in Television

Happened to see a repost about an old (2011) report by the Natural Resources Defense Council (NRDC) finding high electrical costs associated with cable boxes. The environmental cost of rented equipment often gets overlooked, along with the economic losses it perpetrates. Mostly, renting helps the environment. But chronic/long-term renting, where the energy costs or other negative environmental factors are obscured, should not be confused with short-term, purposeful renting.

But, of course, we went down the equipment rental road with Ma Bell for decades before the government finally stepped in and ruled their scheme illegal. Today most people own their own telephones; the few that still have landlines, anyway.

Still, adoption of subscriber-owned equipment appears negligible in television. Digging around turned up a speech/statement from then-commissioner Susan Ness, 11 June 1998 (that’s 15 years ago) (see FCC: Text document: stsn816.txt). It discusses the FCC implementation of Section 629 of the Communications Act. That section charges the FCC with adopting regulations allowing consumers to replace their rented set-top boxes with commercially-available devices. That section was enacted in 1996.

To date, the adoption rate is dismal. It remains a work in stasis: the government has no ability to bootstrap markets in the manner the law dictates.

We see this pattern repeated. Industry, happy with their oligopolies (hell, just look back at Ma Bell, she never did voluntarily sell phones; it took the government breaking the company up to get it done), maintain them. And that’s what we see with cable. And that’s what we’ve seen with tobacco’s sluggish entry into the electronic cigarette market. And so on.

But given enough time, evolution takes its course. The advent of Internet Protocol video services has begun to foster new set-top boxes. New services. Although still developing, it seems clear that before long the industry that didn’t want to evolve will become extinct. Or will likely use whatever cash they have left to buy some small piece of the new industry just as their mast splinters and their sails (and sales) fall to the sea floor.

Ahoy, but a new raider appears on the horizon. We’ve been reading about self-driving cars, and that the ownership of cars will die off. That’s both good and bad, depending on how quickly an oligopoly develops. We will face the same sort of shipwreck of capitalism that cable has been. Like Michael Caine in The Island, stranded on a desert island of bloodthirsty, inbred swashbucklers.

Does the rental racket, per se, mean oligopoly? Not hardly. The oligopoly of phone and cable came not out of necessity but the desire for an extra subscriber fee. Maybe with a provision similar to the Affordable Care Act’s 80% rule (that 80% of premiums go to actual care), it could have been avoided: if all rental fees had to be at least 80% provisioned for equipment replacement/upgrade.

But for cars, as long as the fleet-ready regulations are low enough, anyone could likely purchase and maintain a vehicle that could generate revenue. That is, if the requirements for an autonomous car to be rentable are low enough (some simple quality test system, payment/route system, etc.), it will thwart the ability for some few companies to simply control the market, excluding competitors.