Cord Cutters Who Embrace Apple TV: Beware the Costs

New data from Digitalsmiths (a TiVo subsidiary) says that about 1.5 million households are planning to cut the cord in the next six months, citing excessive cable/satellite bills. But beware. The cumulative cost of OTT selections could equal or exceed current bills.


OTT content (Over-the-top) is a video content service that's delivered directly to you on the Internet, without a distributor in the middle, and delivered directly on an a set-top box like the Apple TV. A good example is the recently announced HBO Now, for which your iTunes account will be charged US$14.99 per month.

That same survey from Digitalsmiths cited customers who disliked paying over $150 per month for cable/sat but ended up routinely watching only 10 of all the channels offered. In contrast, Netflix offers a rich selection of content for an entry price of about $9 per month.

However, the gimmick with Netflix is that, often, only the first season or two of a series is provided. After you're hooked, you'll have to buy the rest of the seasons on iTunes (if available), DVD or Blu-ray.

The tricky part comes as OTT providers start to think about the value and the economics of offering people a way to obtain their content, all of it, directly in a cord cutting scenario. The result is that HBO Now is premium priced at $15 per month. CBS chief Les Moonves says Showtime is coming soon as OTT. If one could, someday soon, acquire just ten favorite "channels" in OTT mode, and each one valued itself in the same class as HBO, the customer could easily return to $150 per month. And in the process likely be missing some important sports content that's not yet available except via cable or satellite subscriptions.

The reason of course is that content providers are constantly seeking to expand the availability of their wares and grow in revenue. So it's important for them to set a price that reflects the brand and generates desirable income. That means, you guessed it, $150 divided by 10, or amazingly, $15. If average customers think they can save a lot of money by cutting the cord, they can. But only by being very restrictive in choices. Decisions won't be without compromise.

All in all, the best strategy is probably to set a monthly dollar limit and try to live within that. Otherwise, a creeping appetite for new OTT offerings will just continue to add incremental costs and once again take the monthly bills out of control.

There's an old adage that describes the three laws of thermodynamics. I think it applies equally to TV consumption.

You can't win. You can't even break even. You can't get out of the game.

Next page: the tech news debris for the week of March 9.

Page 2 - The Tech News Debris for the Week of March 9


Image credit: Apple

The Apple Watch will be available for pre-order on April 10. As we now know, there are lots of options for the watch and the band. How to choose? Here's a handy Apple Watch selection flowchart that can help you make your decision.

Well, maybe not.

For those people who just can't stand the thought of a plain old MacBook Air or MacBook Pro and really, really want to complain about USB-C on the MacBook, here are the facts by Glenn Fleishman. "Thunderbolted: USB-C is our new connection overlord. Get used to it." Seriously, this is a very well written article.

For example, a simple dock (you know they're coming) will solve most of users' problems. Or just alternate devices as needed. For example, "LaCie announces USB Type-C mobile drives to match Apple's 12-inch MacBook."

I think a lot of the psychology that divides Apple lovers and Apple haters is related to the partisanship we see in politics. Whether it's a snowball in your hand, denying climate change, or whether its a declaration that an Apple Watch cannot succeed, there is a mental process in place that tells a person that he or she is absolutely, inarguably correct. Good insights are found here: "Our partisan brains: exploring the psychology behind denying science."

Arthur C. Clarke's third law says that "Any sufficiently advanced technology is indistinguishable from magic." A corollary must be that any sufficiently large government is indistinguishable from chaos. In that spirit, I present: "AT&T still throttles unlimited data, and FCC isn’t promising to stop it."

Kirk McElhearn continues his series on how he would fix iTunes with parts 10 and 11. Here's the link where you can find all 11 articles to date.

If you want to learn more about Microsoft's A.I. project, called Einstein, see: "Microsoft's digital assistant to head to Android, Apple devices." I see Microsoft Thinking Different nowadays. Here's a nice explanation of the company's initiatives from the article above.

[They represent a] new front in CEO Satya Nadella's battle to sell Microsoft software on any device or platform, rather than trying to force customers to use Windows. Success on rivals' platforms could create new markets and greater relevance for the company best known for its decades-old operating system.

Apple Tim Cook had a chat with Jim Cramer, the host of CNBC's "Mad Money," and agreed that the next big frontiers for Apple are the 1) the car, 2) the home and 3) health. Why cars? Because, as Dave Hamilton and I discussed on the March 13 TMO Daily Observation Podcast, Apple is not just a personal electronics company. Apple is a personal technology company.

What's the difference? People who lock onto the idea that Apple is just a personal electronics company think watches and cars and health and home automation are outside Apple's core competencies. People who see Apple as a personal technology company think these are proper and fruitful endeavors that can show the way and make our lives better.

Finally, speaking of Apple and cars, here's a great investigative report on Apple's secret car project. "Project Titan, SixtyEight & SG5: Inside Apple's top-secret electric car project."


Particle Debris is a generally a mix of John Martellaro's observations and opinions about a standout event or article of the week (preamble on page one) followed by a discussion of articles that didn't make the TMO headlines, the technical news debris. The column is published most every Friday except for holidays.