Cord-cutting is only attractive if there's lots of quality content and it's not expensive. Both of those factors could be going away soon--or at lease be substantially diminished--according to Darren Feher, CEO of Conviva, who expects that higher fees and less content will become the norm as the online video space finds its footing.
Rather than enjoying a plethora of high quality a la carte programming, cord-cutters will more than likely be confronted with choices between programming aggregators like Hulu and Netflix (Nasdaq: NFLX), who, in models similar to existing pay TV service providers, will bundle content together with concurrently higher prices, Feher said in a story reported by GigaOM.
"The whole industry is doing a lot of experimentation in places and markets where they are trying to figure out what will work for the U.S. market," said Feher, who knows a little about the industry thanks to his previous day job as CTO of NBCUniversal. "But before that, in the next 12 months there will increasing pressure against cord cutters. The whole authentication thing, where you can't watch content unless you have a cable sub, will be a mess for consumers."
Conviva is caught somewhat in the middle of this new paradigm. The company is working with HBOGo's over-the-top play, including the a la carte Nordic version. But Feher doesn't see that sort of play happening in the United States--at least not yet.
"Inevitability consumers will tell content creators what they want and the content guys will have to respond. There's a whole upcoming generation of 'cord nevers' that the industry has to consider."
That's the future. For now, though, content owners will probably stick to aggregation models that have worked in the past.
Even though cord nevers are growing--"[n]o one brings a TV to college anymore," Feher said--"in the short term there will be a lot more pressure on aggregators like Netflix and Hulu, and the consumer will feel that in less content or higher prices."
- GigaOM had this story
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