Why Cord Cutting Should Have Been TCA’s Hottest Topic

TCA 2016: Cable executives won’t be able to gloss over challenges to their business much longer

The big stories from the Television Critics Association’s winter press tour, which ends Tuesday, have been familiar: FX CEO John Landgraf kept talking about too much TV. Netflix content chief Ted Sarandos kept not talking about viewership data.

But the biggest story at TCA was the one that most people wanted to pretend didn’t exist.

In the second half of 2015, worries over cable subscriber declines soured financial markets on big media companies and forced top-tier executives like Disney’s Bob Iger to go on the defensive when talking about their businesses.

But TCA saw little talk of cord cutters — the industry mumbo-jumbo term for people who ditch their cable subscriptions. ESPN, whose subscriber losses sparked a media-stock panic last year, kicked off TCA two weeks ago not with a full-throated defense of the company’s lavish spending on sports rights, but with documentary filmmakers hyping movies about the Chicago Bears and O.J. Simpson.

When cord cutting did come up, cable executives took to whistling past the graveyard. Filmmaker-turned-TV executive Spike Jonze took the stage to enthusiastically introduce the programming slate for Viceland, the cable channel being launched by Vice Media and A+E Networks in February.

But when asked why Vice — a company that has achieved huge growth while focusing on digital-video — wants into a business whose customer base is shrinking, Jonze said that “the channel to us is just one means of distribution.”

Viceland’s shows, Jonze told TheWrap, will also “live on our website, on iTunes, on Netflix, on Hulu. There will be pieces on Snapchat. However you absorb content, we’ll have something to say.”

Which says a lot of nothing about how Viceland plans to draw a young core audience to a linear channel or how it plans to monetize its programming.

Kevin Reilly, who attended his first TCA since taking over as president of TNT and TBS, touted the continued power of cable as a platform. But he also talked up parent company Turner’s efforts to diversify its business, pointing to last year’s acquisition of digital company iStreamPlanet.

“Vice decides to get into the cable business, I’m getting into Vice’s business,” Reilly told TheWrap. “I believe there can be a real symbiotic relationship that nobody’s quite proved yet.”

Cable needs someone to produce some proof pretty soon. ESPN, the most successful of all ad-supported channels, has lost 7 percent of its subscribers since 2013. PricewaterhouseCoopers predicted last month that as many as 20 percent of cable subscribers could cut the cord in 2016.

Those cord cutters are not consuming less programming — they’re finding it elsewhere. On Sunday, streaming service Netflix presented what was hands down this TCA’s most exciting lineup, trotting out casts and creators for buzz machines “Orange Is the New Black,” “Unbreakable Kimmy Schmidt,” “Jessica Jones” and “Making a Murderer,” as well as new shows from the likes of Judd Apatow and Ashton Kutcher and revivals of “Degrassi” and “Full House.”

Hulu and Amazon also presented, promoting programming that would be at home on the best cable channels. Though none of those services release viewership data, they have all continued to add subscribers as cable loses them.

Turner, in the face of that competition, isn’t the only cable company venturing into digital. NBCUniversal last year launched Seeso, a comedy-focused streaming service headed by former Pivot and Sundance Channel executive Evan Shapiro. But those companies face an uphill battle against the likes of Netflix, Amazon and Hulu — and YouTube and Apple — which have been living in the digital space for years.

As FX’s Landgraf said during his executive session Saturday, “We all have a stake in saying really positive things about the health of the businesses that we run.” So it’s unsurprising that questions about threats to cable’s business model are met with vague and sunny talk about pivoting to digital.

“I wish it weren’t happening, but it feels manageable to me,” Landgraf told TheWrap when asked about subscriber loss after his executive session. “We’d rather be paid by 100 million homes than in 93 [million], but we’re still increasing our revenue on the affiliate side, because we’ve had 12 years of momentum and success.” He added, “We’ve so far managed to manage our way through this transition pretty well.”

But so far isn’t all the way, and not every channel is positioned as well as FX, Turner and cable’s other top brands. As more cords get cut, the questions will get tougher and more frequent.

Scene at TCA 2016 Winter Press Tour (Updating Photos)

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