Peter Kafka

Recent Posts by Peter Kafka

Maybe Cord Cutting Isn't Here Yet. What About Cord Shaving?

Here’s an answer that might satisfy the two sides in the “Cord cutting is real! No it isn’t!” debate: Perhaps Web video fans aren’t dumping cable in favor of Netflix, Hulu, etc. Perhaps they’re just dumping premium cable channels, like HBO.

We can call this the “cord shaving” argument, and if I could remember where I first saw the term, I’d be happy to give them credit. (My hunch is that it was BTIG Research’s Rich Greenfield. Or maybe digital-media-executive-turned-aggregator Jason Hirschhorn. Or maybe Video Nuze, etc.).

This one has a nice ring of logic to it: You’d have to be a very committed non-cable watcher to dump your entire service and make do with the Web stuff. But depending on your viewing habits, it might be quite easy to substitute, say, Netflix for HBO.

It would be cheaper, too–you’d just have to wait a while to see “Boardwalk Empire” or “Game of Thrones.” (Though I’d still pay a premium to see Kenny Powers.)*

And that may be what we’re starting to see now.

Here, for instance, is a new study from Accenture that draws a connection between Web video watchers and a drop in premium cable: It figures the Internet is responsible for an eight percent drop in subscriptions.

Alas, just as with the cord-cutting debate, we may be stuck, for a while, with competing sets of data.

Market researcher SNL Kagan, for instance, says that in the last quarter of 2010, subscriptions shot up for CBS’ Showtime and Liberty’s Starz, while Time Warner’s HBO stayed steady.

These are apples and oranges data points: The Accenture numbers are taken worldwide, while the Kagan numbers are U.S.-only. And they cover different time periods, too. Etc.

Still, there’s a reason why Time Warner CEO Jeff Bewkes has been so forceful about bashing Netflix publicly. Investors, at least, are concerned that the Web service (and perhaps Web video in general) will indeed cut into HBO’s business. So this won’t be the last we hear about this one.

And here’s one of the least unsafe-for-work Kenny Powers clips I could find. But it is still not going to be safe for some workplaces. It is awesome, though:

* For the concerned reader who inquired: No, you can’t get anything HBO shows via Netflix’ streaming service. But if you’re patient enough, and you subscribe to the DVD tier of the service, you’ll be able to get the shows and movies that way.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik