Yglesias is right to point out that not everyone is like us: specifically, most people are not technologically-literate yuppies with motivations for avoiding cable TV subscription (e.g. self-betterment; vague anti-corporate resentment) that go beyond a simple cost/benefit calculation.
But! I still think he’s too skeptical about the prospects for widespread cord-cutting. Matt doesn’t link to any figures, but, contra the headline, this chart sure looks like it’s showing a downward trend to me, albeit one that’s noisy and surely confounded by other effects like slowed household formation. And there’s some reason to think that cord-cutting is still a nascent idea but one that, like abandoning landlines, will catch on once people see their peers doing it without ruining their lives.
I’ll add that my own experience doing without cable TV has been a positive one. Netflix reliably has stuff I want to watch; iTunes has delivered season passes to the new Avatar series and Deadliest Catch that, while not a steal, are reasonably priced and, aside from the slightly delayed delivery and regrettable absence of Cap’n Phil (RIP), totally acceptable. Live sports remain the real problem, of course. A few years ago, when the leagues did their business with broadcast networks that made their money on ads, this would’ve been totally solvable. Recent years’ shenanigans with cable networks and proprietary distribution channels make this situation seem a bit less hopeful, but I’m optimistic that growing consumer impatience will eventually spur lawmakers to get involved with these legally-granted monopolies and deliver the digital bread and circuses that the public rightly demands.
Finally, Matt makes a technical point:
The problem for people who do want to watch all their TV over the internet is that to provide enough video content to everyone for that to be the standard way of doing things, you’d need much more broadband capacity. And we could build much more broadband capacity, but people would have to want to buy it. And at the moment, it seems like people don’t really want to. Of course they would want to if cable television stopped existing, but all the infrastructure is already there. Now maybe aggregate population preferences will change over time. There’s certainly some evidence that they’re shifting a bit. But hard as it is for web junkies to remember, lots of people seem perfectly happy checking Facebook on their phone.
First: I do think preferences will change over time. Cohort replacement!
Second, there’s more capacity than might be apparent. The basic problem Matt’s gesturing toward is broadcast versus video-on-demand (VOD). Multiple viewers can watch a single, synchronous stream of programming — the same amount of bandwidth is needed regardless of how many people tune in. For on-demand stuff, everyone typically needs their own stream of data, making scalability a problem.
But of course most cable providers now offer substantial VOD services without choking their systems. I believe that AT&T’s U-verse system actually delivers everything in a VOD-like manner, though it’s a bit hard to suss out the details. Regardless, one can easily imagine various solutions to this that take advantage of consumer predictability and caching technology. When you tune into The Voice, you could be offered the option of watching immediately for a surcharge or waiting X minutes to hop on the next every-X-minutes scheduled broadcast stream. Or your DVR could download the week’s ads every Sunday night, then stagger their distribution between pre-roll and mid-broadcast placement in order to line you up with the next broadcast stream. One can even imagine dynamic schemes where content is priced according to current network conditions and your subnet-neighbors’ current viewing habits. That would probably be economically fascinating enough that even Matt would be in favor.