What Really is the Future of Cable?

     "Are Big Media Companies Needlessly Frightened About Pay TV Cord Cutting?" is the big question that everyone is asking this week. Well, not big but rather a substantial one that deserves an answer. Lazard Capital Markets' Barton Crockett seems to think so about companies, that they are needlessly scared. He regarded in one of his analyst essays that this cord cutting could be good for the "content-owning conglomerates" if the consumers begin using the internet to subscribe to the channels they want. Although Crockett takes a step back and states that the current system of pay TV bundling is not going away soon anyway and thus the companies are being excessive in their worries.
     Crockett challenges the "conventional wisdom that media giants would find themselves on a ride to financial ruin if consumers escaped from a system that requires them to pay for channels they don't want." These are based on two assumptions: Consumers would continue to spend $78B a year on pay TV. And, in a post-bundle world, content creators could collect all of that instead of settling for the $32B in program fees that they currently receive from distributors. 

     He continues on to say that actors or producers wouldn’t try to appeal directly to consumers, cutting out Big Media companies, because they need someone who will "write big checks, and take care of the administrative hassles of marketing and distribution. Anyone can make a singing competition, but networks like Fox and NBC can make them popular by touting them to large audiences, and investing large sums for the highest profile judges and best production values."
     Now I'm not really sure how I feel about this article, which is why it caught my eye. These finance and media experts seem to talk hypothetically about the future of the television industry. Although they are "experts," the industry changes along with its audience and technology and etc. so can we really call anyone an expert? Alas, this article seems to neglect the issue of advertising. Here is a comment on the article that pretty much summed up my thoughts: 

       Part of the motivation for the “a la cart” plan versus the “hard wired” plan is that audiences —          otherwise known as consumers — are eager to watch what they want WITHOUT the burden of 20 minutes of commercials shoved at them. Whether by dvr shifting or vod streaming with minimal commercials it’s all leading to the same place. The billions that advertisers have been paying for decades to capture their consumers via tv advertising are largely wasted in this changing climate (CORD OR NO CORD). They know it and the big money is quickly leaking out of the broadcast AND ad supported cable (In terms of advertising, they are the same.) The increasingly depressed ratings of nearly all the ad supported networks, bcast and cable, is hastening this process.

     Advertisers are already facing a tough problem as it is with items such as the DVR (Alexa points this out in her article "DVR Kills"). The pay TV industry had never had in its history posted a quarterly subscriber decline until 2010. With all these options of cord cutting and DVR, it makes you wonder how cable will deal with this. Now I understand that according to the "experts" this wouldn't happen but you have to think that it is a possibility that one day everyone might jump the gun and actually manage to give the industry a problem they cannot even fathom. That's why while Crockett's answer to the question might be yes, mine is no. The big media companies do have a reason to be frightened. The loss of ad dollars and subscribers..... The billions of dollars made from the advertising is what practically runs the media companies. It pays for practically everyone and everything. The advertisement money pays for writers, actors, directors, the crew, and pretty much everyone else on the payroll as well other operating needs. 
     As a consumer, the article made me realize that cord cutting affects advertising which in turn affects the industry. Everything connects, it's like a domino effect. It may just seem like I'm just one consumer however one turns into two which in turn leads to thousands and millions of other consumers doing the same thing. 

     As a student, it had made me realize as to why advertising is ingrained into our brains from birth. We know the McDonalds slogan by heart and we know the Disney symbol by heart as well. Advertising makes the world go round. Eventually, it may cease but what will replace it? And here is where I, as a future filmmaker, come in. This article has only gotten me interested in doing more research as to other options consumers have in terms of the television - cord cutting and the like. I should do more research as to where the industry really does manage to get its revenue. I find this vitally important now because we seem to be facing a new type of problem that we can only hypothesize solutions about. 

     What do you think about cord cutting? Do you agree with Crockett and have you also noticed the issue that advertisers (and in turn the whole industry) has to face?