NBC Exec: Netflix Poses No Threat To Us, God Wants You To Watch Expensive, Legacy TV

from the not-just-a-river-in-Egypt dept

Fri, Jan 15th 2016 11:42am — Karl Bode

The traditional cable and broadcast industry's chief export is no longer quality programming, it's denial. First the industry denied cord cutting even existed. Then it acknowledged it existed, but pretended it was only something losers living with mommy had any interest in. More recently the cable industry has acknowledged that yes, there is something that vaguely looks like a mammoth tsunami looming on the horizon, but people are totally overreacting because the cable industry is just so god damned innovative.

Historically, the cable industry has needed all the help it could get when it comes to laboring under the delusion that the legacy cable cash cow will live forever. And, as Nielsen's failure to provide real data on cord cutting has shown, the industry employs plenty of people happy to take money in exchange for telling industry executives precisely what they want to hear. Lending a hand this week was NBC's president of research and media development Andy Wurtzel, who proudly told attendees of the Television Critics Association's winter press tour that neither Netflix nor YouTube pose a "consistent" threat to cable.

His only evidence? That Netflix's top shows still only get a fraction of the viewership that traditional cable gets:

"Symphony measured the average audience in the 18-to-49 demographic for each episode within 35 days of a new Netflix series premiere between September and December. During that time, Marvel's Jessica Jones averaged 4.8 million viewers in the demographic, comparable to the 18-to-49 ratings for How to Get Away with Murder and Modern Family. Master of None drew 3.9 million in the demo and Narcos was third with 3.2 million."

Nobody denies that cable TV's audience still towers over that of streaming video services. That's never been in dispute. Nor has anyone really debated the fact that cord cutting is a slow but steady phenomenon (NBC's parent company Comcast lost 48,000 video subscribers last quarter). But that doesn't really change the fact that the threat obviously exists, or that cable needs to dramatically change to adapt to it. But Wurtzel for some reason seems convinced that because viewership for Netflix hit shows drops off after a few weeks of binge watching, this somehow means cable has nothing to worry about:

"Wurtzel said Symphony's data also revealed that most viewers of those SVOD shows return to their old viewing habits by the third week. "[By then], people are watching TV the way that God intended"—that is, via traditional, linear viewing—said Wurtzel. "The impact goes away."

That's because Netflix has "a very different business model—their business model is to make you write a check the next month," said Wurtzel. "I don't believe there's enough stuff on Netflix that is broad enough and consistent enough to affect us in a meaningful way on a consistent basis."

But again, cord cutting isn't about just Netflix. It's about picking and choosing among a myriad of different options as an alternative to soaring cable rates. One fifth of pay TV customers are expected to cut the cord next year. Only 51% watch live TV (as "god intended"?). Consumers are tired of paying an arm and a leg to get 194 channels while only watching, on average, about 17 of them. And, to put it bluntly, cable's biggest customers are dying, and being replaced by "cord nevers" that have absolutely no interest in paying too much for too little.

The threat is more than just consistent, it's inevitable.

Fueled by the kind of bubbly optimism provided by Wurtzel, legacy cable honestly believes it's doing a bang up job adapting to the Netflix threat. Except that's not remotely true; the industry refuses to compete on price, consistently fights more flexible programming options tooth and nail, and still confuses proclamations of "Hey, we're innovating!" with actual innovation. Were I Netflix, Amazon, Apple, or any of a million other companies eager to jump into the field, I'd be thrilled that guys like Wurtzel continue to provide a false sense of security across an industry so desperately in need of a disruptive kick in the ass.

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Filed Under: andy wurtzel, broadcast tv, cord cutting, denial, internet, nbc, streaming video, tv
Companies: comcast, nbc universal, netflix

33 Comments

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limbodog (profile), 15 Jan 2016 @ 12:11pm

You misunderstand
"people are totally overreacting because the cable industry is just so god damned innovative."

You're being ironic, but you just didn't know that he was referring to their legislative department.
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jupiterkansas (profile), 15 Jan 2016 @ 12:15pm

Considering the amount of televangelist hokum being broadcast over the airwaves, I guess that is what God intended - free and easily ignored.
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Anonymous Coward, 15 Jan 2016 @ 12:26pm

Re:
...the amount of televangelist hokum being broadcast over the airwaves...

The only stuff of that kind I get always begs for money, or "love gifts". I've forgotten when the last time I saw a televised preacher NOT ask for donations and just preached the message.
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DannyB (profile), 15 Jan 2016 @ 12:26pm

Re:
Hey now. God also intended for you to watch infomercials. And Netflix is not innovative enough to have those. So there.
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sehlat (profile), 15 Jan 2016 @ 12:27pm

How long does it take for a legacy industry to get the word?
I haven't had cable since 1992, and have never been tempted back. What DOESN'T cable have that I need?

1. VOD

2. Subtitles

3. A price that's not going to leave my wallet asking "Hey! Where did everybody go?"

What does Netflix have, even without streaming?

1. VOD

2. Subtitles when the title has them available (which is most of them these days.)

3. A price that has my wallet saying "Go ahead and eat hot food and sleep indoors. You're covered."

'nuff said.
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Anonymous Coward, 15 Jan 2016 @ 12:29pm

First they ignore you, then they laugh at you, then they fight you, then you win
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mcinsand, 15 Jan 2016 @ 12:29pm

about that timing
>>But Wurtzel for some reason seems convinced that because
>>viewership for Netflix hit shows drops off after a few
>>weeks of binge watching,

Are there any data for how the viewer distribution changes for traditional broadcast when the traditional season is over? How do summer reruns compare against Netflix?
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DannyB (profile), 15 Jan 2016 @ 12:30pm

Denial
Not to worry. The horse and buggy is not threatened by the new upstart automobiles which are smelly, noisy, unreliable, difficult to start (you can even break your arm cranking it!), and worst of all, they frighten the horses.

Very few people have automobiles.

And most of them are experimenters with money to waste, who live in mommy's basement.

And it will be like that even into the 1900's.
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PRMan (profile), 15 Jan 2016 @ 12:44pm

Re: Re:
There are several of them, but unfortunately they are the minority.

Which is strange because not only did Jesus not ask for money, he provided free food while he was at it.
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Mason Wheeler (profile), 15 Jan 2016 @ 12:44pm

TL;DR: NBC exec does not know what The Long Tail is, despite the term having been around, and actively applied to business on the Internet, for 13 years now.
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PRMan (profile), 15 Jan 2016 @ 12:45pm

Re: How long does it take for a legacy industry to get the word?
Cable has VOD.

Cable has subtitles.

But on the third one you are right on.
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PRMan (profile), 15 Jan 2016 @ 12:49pm

My dad moved out...
I only had Dish because of my 78-year-old father, but now he has moved.

I called Dish and started asking questions about when my contract was up and what my early termination fee would be.

Amazingly, they offered me another $20-a-month off (in addition to the $30-a-month off I already negotiated in the past). I also saved money sending my father's two receivers back.

So now, it's not really worth it for me to quit early anymore, as it's only about a $60 difference over the next 6 months. I think Dish HD on two receivers is worth $10 a month. For now...
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Anonymous Coward, 15 Jan 2016 @ 1:05pm

Re: Re:
You can't get on the Honor Roll of the Chariots of Fire if you don't send bibles to El Salvador.
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David, 15 Jan 2016 @ 1:16pm

about that timeing
Don't they realize that their original programming, even if binged, is a draw that keeps subscribers watching other content in between seasons/shows?

Yes, I watched Daredevil, and awaiting the next season. In the meantime, there's lots of other content to watch, including other original programming.

Here's the issue with network/cable static-timed shows: If I don't record it, I miss watching it when scheduled. If I miss too many episodes, I just stop watching the series entirely.
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Anonymous Coward, 15 Jan 2016 @ 1:23pm

God watches Netflix with a VPN.
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mcinsand, 15 Jan 2016 @ 1:31pm

tangent question: rewatchability
About having watched Daredevil: how many times did you watch the series? I watched it three times. The second time through was much better than the first, and the last time was a little bit better than the second. The first pass through was great, but the second pass made it possible to see how much the writers put into each line. A lot of lines fit a scene on the surface, but they carried more when the viewer knew what was to come.
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Wilhelm Arcturus, 15 Jan 2016 @ 1:39pm

Locked to the Cord
The problem I have, which I imagine is not all that uncommon, is that if I want high speed internet at my home Comcast is my only option. Cutting the cord isn't all that attractive when Comcast will sell you cable plus high speed internet at about the same price as internet by itself. If Google Fiber was a thing where I lived... which is in the middle of Silicon Valley... I might have a chance. But the only alternative is AT&T, which offers speeds that don't actually qualify as high speed any more, or somebody reselling AT&T's bandwidth under another brand.

Solve that problem and NBC will be in a panic. But with such a lock on high speed internet in many markets NBC can afford to sound smug.
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Anonymous Coward, 15 Jan 2016 @ 2:03pm

[Netflix's] business model is to make you write a check the next month," said Wurtzel

So's yours unless you're intending to fully swap to government subsidization, in which case you'll be getting people to write a check once per year.
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John85851 (profile), 15 Jan 2016 @ 2:20pm

They don't learn from history
This is just like the music industry:
Oh, don't worry that a few people download their music. They're outliers and tech nerds. People will always buy CD's.
Oh, don't worry that Apple's iTunes is becoming popular. People will always buy CD's.

Hey, how come no one's buying CD's? We totally didn't see that coming.
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Anonymous Coward, 15 Jan 2016 @ 3:09pm

Re:
[Netflix's] business model is to make you write a check the next month," said Wurtzel
The guy predicting the future evolution of entertainment technology not only talks about 'checks' -- he thinks we still 'write' them.
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Stan, 15 Jan 2016 @ 5:43pm

i fully intend to watch daredevil,and the other superhero show but only after the regular Arrow,Flash,Supergirl,Agents of Shield,League of Legends,Gothem,Izombie,Heroes Reborn shows end for the summer break. Then i will watch the netflix produced shows Daredevil,Jessica Jones and so on That leave me with new fresh shows to watch during the summer instead of reruns all the time. Thats just what i do i am 58 though others have other reasons. I will not cut the cable for now, their is just too much to watch on Cable TV including sports which NF doesn't have.
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That One Guy (profile), 15 Jan 2016 @ 8:38pm

Re: Locked to the Cord
The problem I have, which I imagine is not all that uncommon, is that if I want high speed internet at my home Comcast is my only option. Cutting the cord isn't all that attractive when Comcast will sell you cable plus high speed internet at about the same price as internet by itself.

And that is exactly what they're banking on and using to pretend the problem isn't as big as it actually is. How many people still have cable because they want it, versus how many people only have cable because it's cheaper to get that and internet rather than just internet?

I imagine if you were able to accurately count the latter group, and factored them into the cord-cutter numbers, the cable numbers, already not so great, would end up looking significantly worse.
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Anonymous Coward, 16 Jan 2016 @ 1:31am

Cable tv is about live sports. That's it.

Drops mic and walks away knowing the truth will set everyone free.
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NaBUru38 (profile), 16 Jan 2016 @ 3:26pm

https://bgr.com/2016/01/14/netflix-vs-network-tv-nbc/

Mike, please start using the term "comcastically". It's a synonym of "tragicomically" or "orwellidiotically", I guess.
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Anonymous Coward, 16 Jan 2016 @ 4:02pm

Re:
Assuming congress doesn't drop it while they argue everything to death in the name of stopping the other guy until they're 'forced' to build an omnibus budget.
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John Carpenter (profile), 16 Jan 2016 @ 10:29pm

Listen up all you anonymous cowards. Here's a term you might (probably not, though) have heard of: The Religious Right.

"...God Wants You To Watch Expensive, Legacy TV"

https://en.wikipedia.org/wiki/Christian_right

Have fun exloring, ya Fawkes!
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blue skies (profile), 18 Jan 2016 @ 3:19am

"[By then], people are watching TV the way that God intended"

Why isn't this guy moving to the nearest Amish community asap?
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Ninja (profile), 18 Jan 2016 @ 7:53am

Re:
They are too technologically advanced and forward thinking it seems.
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JBDragon (profile), 18 Jan 2016 @ 2:33pm

Re: Re: Locked to the Cord
Sure you get a good price for Cable and TV, for a period of time and then it jumps up and hope you don't notice.

I cut the cord 4 years ago. One of my other brothers a year ago. My Dad moved into my house, he had DishTV I guess, thought he would miss it. he doesn't! I get a lot of my TV from the Antenna. Besides ABC, CBS, NBC, FOX, PBS, and CW, there's other channels like MeTV and AntennaTV, etc that show a lot of old TV series that are new to you if you've never seen them. He watches a lot of that old stuff. Hogan's Hero's, and Columbo, etc. I have a TIVO and TIVO Mini's and so it can all be DVR and watched at any time. All that is 100% Legally FREE. ZERO monthly costs.

There's other ways to get other content. My Goto is still Netflix. With more and more Original content, it's great and the price is right. You can buy a couple season passes for things yo may really like, Like I get "The Walking Dead" on AMC, from Amazon. I buy a SD season, and I can watch the new Episode the day after it airs on AMC, except commercial free and I own it!!! I get the SD version because it's cheaper and looks good enough. It's still widescreen.

I get enough sports from ABC and FOX, etc for Football, etc. I'm not a huge sports person. You can sign up for MLB and stream that live. There are options. I pay Comcast currently $50 a month for 105Mbps service. That's it. I have my own cable modem. Before I cut the Cord I was paying Comcast $170 a month for much slower internet a TV service with a duel HD DVR tuner. No premium channels either. That was back then. So I'm saving $120 a month currently if I was was still paying Comcast old prices. It would be even higher these days. So no thanks.

Basic math is prices didn't go up. $120 a month is $1,440 per year. In 10 years is $14,400!!!! How long to people keep paying Comcast? 10,20,30+ years!!! Wouldn't you rather keep that kind of money in your own pocket? The key is not signing up for all these other services. You don't need Netflix, HULU_ SlingTV, etc, etc, etc all at once.

If you like Game of Thrones on HBO. That's really about it. Why pay $180 per year ($15 per month!)? Wait for the season to be over, pay $15 for one month and watch the whole season in that month time, which is easy enough and any other content, and then cancel at the end of the month and wait another year and pay for another month. That's 100% legal. It's also a CHEAP way to watch a season of GOT!!!

You get used to things the new way. My 68 year old Dad doesn't have a problem for the most part. He's told me he has to much to watch already. I agree with that!!! I have to much to watch also. I sure don't need 200 channels of garbage and only watch about 20 at most. What a scam. To get that 1 or 2 channels you want. You have to get the BIG package. These company's set it up to get you to spend more money by doing this. I don't play that game anymore.
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JBDragon (profile), 18 Jan 2016 @ 2:45pm

Re:
If that's it, Spend $20 a month and get SlingTV. You get ESPN and ESPN2. If that's not enough Sports for you, for another $5 a month, or $25 a month total, you can get the Sports bundle. That gives you another 9 Sports channels including ESPNEWS. They have 9 different bundles at $5 each. The Sports Extra bundle is one of them.

The downside is you can only stream to 1 TV at a time. It's all LIVE. For the $20 you get 23 LIVE channels. Chanels like AMC, The Food Channel, a couple Kids channels like Disney, CNN etc. A little something for everyone. This is owned by DirectTV.

That's a option.
https://www.sling.com/package#extra-packages
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klaus (profile), 18 Jan 2016 @ 11:04pm

Re: Re: Locked to the Cord
Anywhere normal, that would sound like an incredible business opportunity, with government of any flavour encouraging entrepreneurs to wade in.

I just don't get the US government. At all. I understand the lobbying system, that it's legalized and tied into political donations, and that that makes politicians beholden to lobbyists. And that it's legal, and not bribery in any way. But unless US politicians live on some island somewhere, when their actions benefit lobbyists to the detriment of their own citizens they're just crapping on their own lawn, and that makes no sense.

I feel for you US guys. Have some kittens... http://www.kittenwar.com/
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Violynne (profile), 19 Jan 2016 @ 3:02am

Nobody denies that cable TV's audience still towers over that of streaming video services.
I'm denying it.

The problem is the measurement. It's flawed.

There's a big difference between recording a show for later viewing and watching it when it airs.

Given most new shows are still unavailable online, of course cable still has the lion's share of "viewers".

Nothing like pretending choice exists when everything still revolves around the "captive" audience.
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sehlat (profile), 21 Jan 2016 @ 1:08pm

Re: Re: How long does it take for a legacy industry to get the word?
I've seen what cable calls "subtitles", AKA closed-captions. I earthlight as a proofreader, and if I left text that lousy in a book, I wouldn't even be allowed near an assignment. And VOD only exists for as much space as your expensively-provided box allows, as long as you don't try to skip the commercials.

Meh.
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