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Does cutting the Pay TV cord makes sense in emerging economies?

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Nov, 2016


After decades of dutifully paying your cable bill, you may feel that finally it’s right to cut the cord with pay TV and craft your own package of home entertainment options. You may feel now that you need to herald a new type of viewing relationship with your television or let’s put it in another way: Your cable bill was just too high for you to manage and paying for irrelevant content!

Access to high speed broadband is economical and once you start accessing content through broadband connection you may feel it was a good decision. You may end up saving more than you were saving earlier a month. As a cord cutter and have suffered with high bills you may have noremorse. You will still be  watching all your favorite shows, enjoy high-speed internet and can think of no reason that you shouldn’t join the growing number of people doing so, too.

How do you cut the cord?

“Cutting the cord” is unbundling yourself from your cable provider’s programming contract and replacing its pre-selected, packaged channels with content of your own choice through providers like Netflix, Hot star Etc.

Though considered to be an act of Millennial, even the grown up people are looking to avoid paying high How do you cut the cord?cable bills for unwanted content.

But many consumers of all generations are going towards this route out of frustration with their cable company’s policies. Why pay for hundreds of channels when you can only watch a minimal handful of programs at best price and time of your own choice. There are even websites devoted to learning more about how to up your cord-cutting apps to keep you informed of every program details time to time with the notifications.21


The two main steps to becoming a cord-cutter are that the growing digitization will direct you to

  1. Find your hardware and
  2. Find your own content

These steps must be considered keeping in mind that your content must work on the box you choose.

Think of the hardware box as elegantly designed replacements for your old set-top cable boxes. If you have a Smart TV, you may not need to buy any since many of the apps you’ll need are built in.

You need an antenna as well that will be used to wrangle the over-the-air signal into your living room so you can watch your favorite local stations. Lastly, the Internet access. Make sure you have a connection of at least 5 Mbps (Megabits per second). But if there are members in family using as per their convenience minimum 15 Mbps is required.

For many years, cable tv is the only best way to get high quality shows for specialized audience. For that we need to pay much amount, eventhough we didnt require some content. But, now we no need to pay that lump of amount. We ccan pay the amount which we are seeing. This way it helps a lot

On the other hands, I undermined to cut the cord and dispose of satellite television since I was sick of spending admirably over $100 consistently just to watch a modest bunch of stations I really thought about. I was tired of the horrible client benefit, the absurd concealed charges, and the various cerebral pains and bothers that accompany a digital television membership.

Be that as it may, as a great many people, I stayed a detainee to the link organization basically on the grounds that I didn’t know how to dispose of link without passing up a major opportunity for my most loved Television programs, motion pictures, and live donning occasions. I continued looking online for data and aides on satellite television options, however they were all extremely specialized and difficult to take after.

Cost of alternate options and access to entertainment via alternate sources is catching up but where to find content?

Many local broadcast channels are available in High Definition-quality over the air, for free of charge providing maximum content. For many of us, that will cover a lot of our programming needs. But for programming beyond you’ll need to subscribe to one or more content providers. The other plus point of cord-cutting is that you can always simply unsubscribe when you dont require. In this way you can save your money, as well as you can get the contnt as you like at your convinient time.

Most of these services let you view content on your mobile devices, desktop computer or laptop, what you can watch here is watch or buy your favorite past-season TV programming by the episode or a season at a time plus original content.

If this has all sounded good concept till now, it’s time to do the homework and calculate. Consider that you would have been paying for Internet access anyway, so nothing new added. Amortize the hard costs of your antenna and other hardware, adding to them the cost of your monthly subscriptions for the content services you want and then checking if it’s really worth it to monthly subscribe and switch to digitization.

Cord cutting is having a clear impact on the industry and that can only be good for consumers who have grown sick of paying for dozens, even hundreds, of channels they never watch.

When users have alternate options at economical prices, there is a high chance that one will start thinking about cord cutting.

The growing presence of live sports online says itself that pay-TV companies know they won’t be able to keep making non-sports fans subsidize the costly viewing pleasure of sports enthusiasts.

However, most emerging economies are still undergoing digitization. Access to high speed broadband is scarce. Cord cutting may not happen now, but sure to come through. Cheaper, competitive programming packages are the only way that pay-TV companies can stay in the game.

Most of the networks are posting all the episodes on the very next day. And the viewers are subscrbing to the specific channels.

What could be the road ahead for Cable TV companies?

Cable TV may take the clue from markets such as USA and can come up with pick and choose Pay TV packages, which should help reduce their churn.

For decades, cable television was the best way to get quality shows geared toward specialized audiences. Today, that’s what streaming services do, while cable is more like an expired itemslowly smelling like a waste to both consumers’ wallets and their sense of good taste. Cable TV still has some great shows, but you no longer need to pay through the nose to get them with growing competition among cable TV and digitization, not when you can cut the cord.

But then even cable guys can play smart. Dropping cable does not, in most cases, simply mean lopping that portion off your Pay TV billing. Instead cutting the cord also causes you to lose your bundling savings.

In some cases the internet providers may push the cost of internet service to higher than what the full package including cable cost anyway.Specifically when your cable provider and internet service provider are same.


Indian Scenario with growing OTT providers and Pay TV; will cutting the cord work?


With the growing Millennial in India and them having their own choices, the video contentis increasingly consumed, shared and generated; the traffic of such content over the internet is increasing. The OTT providers are earning more than Pay TV and hence the Internet Traffic is getting a boost too. They make their revenue majorly by advertisement. Recent report released by the Telecom Regulatory Authority of India (TRAI) on OTT services mentioned the rise of OTT media services traffic.

Though its US which still leads in consumption of internet based services specifically YouTube accounts for 17.1 % of fixed access traffic; India is still lacking because of poor broadband services and its penetration. TRAI says with just 4% penetration of Broad Band Services in India there are many challenges to be overcome by the broadcasting industry.

The Internet based services like OTT had approximately 12 million subscribers and grew to 15 million in 2015; by 2020 it’s expected to be around 105 million by a report launched by Media Partners Asia.

According to FICCI-KPMG report, With 168 million TV households in India in 2014 out of which 149 million are cable and satellite (C&S) subscribers, OTT media has grown quite a lot in just a short span and isexpected to grow tremendously on the back of smart phone penetration in India, though poor broadband penetration and bandwidth still posing challenges in its growth.

As Cable and Satellite penetration is one of the highest reaching mediums today in India we cannot cut the cords directly with them and rely on Internet based apps for giving away the content specifically when India is still a growing economy and reaching out to maximum people is still based on cable network. The best they can do is with existing infrastructure they can partner with MSOs (Multiple System Operators) and satellite players to increase their reach. Such a partnership is possible if the cable or DTH player has broadband services too. There are already many MSOs in India that already offer broadband services in addition to their cable services.

At the moment the most feasible solution for both OTT players as well as cable operators is to bundle up OTT services for people to watch on TV thus becoming an extended arm for OTT players. They can fix some amount based on rates being charged to be shared between them.

There is however many  players who are considering  doing this currently by providing OTT services through their own set-top box by partnering with LCOs (last mile cable operators).LCOs cover 75% of the population, whereas internet service providers connect hardly 10%. 20 million homes have fixed line internet out of 200 million.

The internet service provider if decides to collaborate with the cable provider or the LCO the reach of the internet will increase from 10% to 75%.

For C&S players this definitely could be the way ahead as the relevance and viewership of OTT is expected to grow significantly in India.  If they do not wish to get extinct in coming time this model seems more likely to be adopted. This is going to push OTT media services growth and will open many other doors for revenue for such players.

Now-a-days video and entertainemt content is increasingly seems to be depleted, shared with friends and generated. The traffic of such content  is increasing over the internet.

Thus, for now cutting the cord with Pay TV is not a great idea for the growing economies as they still hold maximum viewerships compared to internet based services. Though the coming future will definitely force these providers to change as the digitization will take over the market.

By : Ramakrishna Mashetty

Ramakrishna Mashetty is The Chief Marketing officer of SURE! (a Magnaquest product).SURE! is an internationally acclaimed player in comprehensive end-to-end Subscription Business Solutions for PayTV, Broadband and Cloud Computing businesses – through deployment of Metered Billing, CRM, Service Fulfillment, Value-Added Services, and Managed Services.