Despite the fact that many millennials are using their laptops and mobile devices to digest content, cord-cutting—the trend in which people are ceasing to pay for standard cable and instead consuming over-the-top (OTT) content from providers like Netflix—is more of an idea than an actual reality, according to Jeff Bewkes, CEO of Time Warner.“I think you’re right to call it more of a notion than a reality,” Bewkes said at the Sanford C. Bernstein Strategic Decisions Conference last month.
Collectively, the cable industry has lost 5 million customers during the last five years. Despite this research that indicates the contrary, Bewkes said the fact that the younger generation is choosing less expensive alternatives to cable isn’t a concern of his company, as those people will become cable customers as they get older and more established in their careers.
Moving forward, Bewkes said his company will seek to double up its TV Everywhere efforts, as services like HBO Go have showcased their value in providing customers with the ability to access the content they want, when they want it, wherever they happen to find themselves. Time Warner is also going to try and direct its original programming toward a generation that grew up on shows like “Breaking Bad” and “The Sopranos.”
Still, Time Warner relies on its cable subscribers for its finances. In fact, the company gets 90 percent of its revenue from them. So take Bewkes’ rhetoric with a grain of salt, as it may follow that no matter what his own thoughts on the matter, he would likely dismiss cord-cutting.
With so much money at stake, cable companies have to be concerned about the rise of OTT content and what its increasing popularity might mean for their long-term financial vitality.