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International In-house Counsel Journal Vol. 11, No. 41, Autumn 2017, 1 The Future is Cordless: How the Cordless Future will Impact Traditional Television SABRINA JO LEWIS Director of Business Affairs, Paramount Television, USA Introduction A cord-cutter is a person who cancels a paid television subscription or landline phone connection for an alternative Internet-based or wireless service. Cord-cutting is the result of competitive new media platforms such as Netflix, Amazon, Hulu, iTunes and YouTube. As new media platforms continue to expand and dominate the industry, more consumers are prepared to cut cords to save money. Online television platforms offer consumers customized content with no annual contract for a fraction of the price. As a result, since 2012, nearly 8 million United States households have cut cords, according to Wall Street research firm MoffettNathanson.1 One out of seven Americans has cut the cord.2 Nielsen started counting internet-based cable-like service subscribers at the start of 2017 and their data shows that such services have at least 1.3 million customers and are still growing.3 The three most popular subscription video-on-demand (“SVOD”) providers are Netflix, Amazon Prime and HULU Plus. According to Entertainment Merchants Association’s annual industry report, 72% of households with broadband subscribe to an SVOD service.4 During a recent interview on CNBC, Corey Barrett, a senior media analyst at M Science, explained that Hulu, not Netflix, appears to be driving the recent increase in cord-cutting, meaning cord-cutting was most pronounced among Hulu subscribers.5 Some consumers may decide not to cut cords because of sports programming or the inability to watch live programing on new media platforms.
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