Cord Cutting: An Economic Issue?

On Day One of the Digital Hollywood Media Summit in New York City, cord-cutting was the topic du jour, perhaps because of wire-service reports that Netflix has been talking with cable operators regarding offering its service to their subscribers.

Bruce Eisen, vice president/Online Content Development & Strategy at DISH, noted, “To the best of my knowledge it’s not DISH, which means it’s probably DISH.” Added Mara Winokur, senior vice president/Digital Media, Business Development and Strategy at Starz Media, which pulled its content from the streaming service last year, said she would be “very surprised if a Comcast or Time Warner [Cable] announced they were carrying Netflix as a premium channel.”

However, Winokur doubts the industry will see this in the next couple of years, in part because the cost of the service will go way up; in her experience with CEO Reed Hastings, costs are not a small matter: “They’ve been crying about money, [saying] we don’t have enough money.”

Other execs cited the high cost of original programming as well, including Music Choice President/CEO David J. Del Beccaro. “There isn’t a interesting program that can make money on the Web in a non-subscription program,” he said. “Analysts have been too focused on cord cutting. It’s the cord never-getters the industry has to worry about.”

Starz Media’s Winokur said she’s more worried about the “cord shavers” who’ve trimmed their packages for economic reasons: “A lot of it is based on the economy, not Netflix or whatever.”