The A la Carte Economy and the Death of Packages

As someone who is an active DirecTV subscriber, Netflix subscriber, Amazon Prime member and frequent RedBox consumer, the engaging nature of passive media is something I am very interested in. Whether it is watching a live sporting event, viewing some of my favorite shows, or watching Hollywood’s next blockbuster, allowing myself to sit back and allow the media to consume over me allows me to unwind after a stressful day or immerse myself into another world.

But while I subscribe to a battery of viewing options, I continuously am frustrated when I see my account and consider the fact I watch 5% of the available options on my DirecTV package. I have often thought about joining the massive list of cord cutters and relying on my other media options to fill the void. This got me thinking of what I consider to be the future of TV, and potentially the death of any package offerings. Below I will list several reasons WHY I feel the package economy we knew and loved, has run its course and will soon make way for the a la carte economy.

  1. More options available: Did you see the list of options I subscribe to above?? That is probably 10% of the options available to consumers. HBOgo, Hulu Plus….the list goes on for consumers. With more options comes a higher inclination to investigate those options.
  2. Costs become too great: Consumers are reaching a breaking point with the continuous price increases, shrinking of channel options, and difficult customer services experiences. The now infamous Comcast customer service video just highlights one of many troublesome phones calls consumers can experience when running into problems with their cable providers. When there are many other (and potentially superior) options available, seeing that ever increasing debit hit their account just adds to the allure to move on.
  3. Networks being squeezed: Every year or so, you see networks in deep negotiation with cable providers to establish a new contract, fight for their money, all to attract an ever shrinking consumer base. Networks are realizing the a la carte consumer mindset is already here and establishing apps to appease those consumers who are not interested in the larger package buy,  AMC, HBO, Showtime, etc. all see that value with more jumping on board.
  4. Mobile: With the volatile growth of mobile, consumers want to take their content on the road. While many of the providers are reacting to this by creating apps in which consumers can control their DVRs and recording devices from home, it doesn’t help the fact that consumers want to consume content on the road, the same they would on their TV. The mobile apps provided by various networks (again…HBO, AMC, etc.) allow you to consume content no matter where you are. Some of the providers are allowing you to download your DVR’d material and take it on the road but new material, that would require a Slingbox. Yes, another device and clunky, fragmented experience.
  5. Digital Advertising vs. TV advertising: 2014 marked the first year that mobile advertising overtook traditional advertising. Brands, agencies, and the like all see the benefit and measurability of digital advertising. With streaming content showcasing native ads, consumers recording content through DVRs, the value of the traditional TV continues to shrink. Digital is completely measurable, which helps showcase the value of digital to the corner office, and allows you to reach exactly the consumer you are interested in. This is incredibly important in an economy of increasing attention fragmentation.
  6. Cords = Ugly, Terrible, Waste of space: Who wants to place their gorgeous flat screen TV on the wall, only to make it hideously ugly with a bevy of wires hanging from it. The cable boxes alone are ugly and almost feel very antiquated in a time most TVs are connected through the web. The provide’rs reluctance (or talent gap) to provide a TV app that works exactly the same as the cable box (and integrates with the other apps on the TV) just make it easier for consumers to jump to the apps that actually do provide benefit. Consumers have been familiar with TV apps for years, why did it take so long to bring them to cable providers.

I just started on the TV industry. You can insert just about every industry that offers packages in a time where consumers are looking to pick and choose as much as possible. Those organizations that stop putting profits before the consumer experience are going to just provide consumers another reason they need to look for another solution. The options are too plentiful to possess the mindset that consumers have nowhere else to go.

We already curate everything in our lives in order to get maximum value out of our choices. Our music stations are perfectly curated, heck our phones are a model of curation that gives many museums a run for their money. Why shouldn’t we be able to continue to curate our life with all of our media? There is a massive paradigm shift on the horizon for the package mindset. Those willing to break up the packages and allow consumers a choice will win that consumer attention and preserve further growth.

What do you think is going to happen in the a la carte economy?

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