Sean Fallon has a post up at Gizmodo titled “Life Without Cable or Satellite Is Easier Than You Think.” Fallon’s central argument is that all the shows you watch are available freely online, and you just need to connect a PC to your TV to get all the same content. It’s a premise we have seen before in countless posts and newspaper articles. As in those articles that came before it, however, the premise is simply not true.

Broadcast Programs Aren’t Cable

To begin with, Fallon makes the same mistake others have made in confusing broadcast versus cable content. His list of favorite shows is rich with broadcast content.

I’m not a TV addict by a long shot, but there are shows that I watch religiously. These shows include 30 Rock, Lost, Family Guy, Californication and Dexter. The following graph illustrates the pluses and minuses of viewing a handful of different shows—not just my favorites—from popular networks.

The graph includes those mentioned plus The Daily Show, CSI, Deadliest Catch, and Entourage. Of the nine programs he specifically mentions, four (30 Rock, Lost, Family Guy, and CSI) are broadcast offerings available with nothing more than rabbit ears (for those with an HDTV or rabbit ears and a converter box for those without an HD tuner).

The other 5 are actually cable content. So, let’s focus this discussion on those to see how “easy” it would be to get them online.

The Daily Show makes most of its content available online for free. The program is relatively inexpensive to produce and Viacom has chosen to make it widely available via the Internet. Based on one network’s decision to make its content available for free, Fallon makes the laughable suggestion that all cable operators, regardless of the production costs of their shows, “move away from old revenue models and look towards the future.”

So what, exactly does Fallon’s future business model look like? To answer that, let’s look at one of Fallon’s examples.

Time Sensitivity and Value

Comedy Central’s Daily Show and The Colbert Report are often cited as examples of the new business model based on giving away content for free. For the most part, both of these shows are placed online almost immediately after their original air date. People arguing for “cord-cutting” often cite them in their arguments. Unfortunately, they’re actually very poor examples for one specific reason. They’re time-sensitive.

These two programs, being based on current events, lose value as the viewer is further and further removed from the context of the events. Yes, the shows may still be humorous if viewed weeks later, but what about months? What about years? In other words, their shelf life is limited.

Typical sitcoms, where the humor is situation-based, can be viewed much later and retain relevance. The clothes may appear dated, but the story still rings true. That’s why shows like Friends, Cheers, and Gilligan’s Island may be in syndication for a decade or more after their original air date. Shows like The Colbert Report and The Daily Show have almost no syndication value. Comedy Central can pick up more revenue through online ads in the days and weeks immediately following broadcast than they would be able to with DVD sales months later.

So we see in one of Fallon’s specific examples a clear reason for making the content available online. What about the rest?

Broadcast Versus Cable Business Models

Since we have begun the discussion of value, we should look at the ways that programs earn revenue. Broadcast programs typically earn the bulk of their revenue from advertising based on their original air date. Broadcasters sell ads and support the programs with that revenue. Shows are routinely canceled when they don’t draw enough viewers to earn a return based on advertising. This has become a particularly troublesome business model as ads are increasingly avoided through the use of DVRs and online viewing.

Cable programming is based on a different model. While cable show still feature advertising, cable programmers also earn a per-subscriber fee from the operators who carry their channel. This revenue model works better as it provides a stable source of revenue separate from the regular fluctuations of ad income. Under this model, the subscriber fees are based on exclusivity of content. If the same content were suddenly available for free elsewhere, the incentive to subscribe is gone and you’re suddenly back to a purely ad-supported model.

Fallon cleverly ignores the fact that most of the shows he cites are among the most protected of cable’s programs. Deadliest Catch, Dexter, Californication, and Entourage are exceptionally difficult to find elsewhere. As he mentions, only one episode of Californication and Dexter were made available via Netflix, and only for a short time. He is correct that you can buy entire seasons on DVD, or rent them, but that is typically months after their original air date. If you want to watch these shows when your friends are watching and talking about them, a six month or greater delay is simply not an option.

So How “Easy” Is It To Drop Cable And Get It All Online?

Fallon’s central thesis and the title of his post come down to it being “easier than you think” to have life without cable. Yet his post demonstrates quite the opposite. He freely acknowledges that 4 of the 5 cable shows he watches are not at all easy to find without a cable provider; the one program that is easy to find is available primarily because it carries an expiration date; and the remaining 4 programs aren’t cable programs at all.

We have stated on a number of occasions a simple truth: If you are watching cable to get broadcast programming, you may be paying for a service you don’t need.

If, however, you are subscribing to cable because you enjoy the tremendous variety of cable programming – everything from Entourage and Jon & Kate Plus Eight to Real Housewives of Orange County and ESPN sports, then you simply won’t find the programs, or the quality of programs available anywhere else.

Tags: cord-cutting

This entry was posted on Wednesday, October 7th, 2009 at 12:21 pm and is filed under Cable Programming, Tech Discussions, Video. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.