To Cut or Not (Cord Cutting)

Recently a few friends of mine were engaged in a heated argument surrounding what is fondly called in Trinidad "Android boxes" or to the rest of the world "Kodi Boxes". These boxes enable a user who has the right apps and add-ons to access copyrighted material such as premium pay-for-TV channels, live sport, and films. For the most part out of a group of 9, 6 favored these boxes with 3 against. The 3 against was a lawyer, one telecoms executive (hmmm) and a musician. The arguments for cord cutting were as follows:

1) Rising cable subscription cost.
2) Commercial-free viewing.
3) No need to Pay for unwanted channels.
4) TV on demand (Watch what I want when I want).
5) TV "anywhere" (Once a Broadband (BB) connection is available).
6) Freeing the younger generation from subscription cable services (Cord Nevers).
7) One time fee (box pays for itself in a few months).
8) BB cost cheaper than TV subscription.
9) Movies/TV Show quality (1080P and 720P).
10) Cinema is too expensive.

The arguments for not cutting:

1) It's illegal (Selling of boxes got one user 4 years in an English prison).
2) The impact of piracy on thousands of jobs. (ESPN Layoffs)
3) Loss of revenue to parties in the entertainment industry supply chain. (AT&T lost 233,000  customers in Q1 2017 because of cord-cutting and cheap data plans)

The entertainment industry has always had to contend with piracy just like the music industry. Twenty years ago, monetizing content meant releasing it to a sizable audience at the multiplex or on VHS, DVD, pay-per-view or cable television. This is being challenged by today's customer demand for streaming on-demand content.

What are operators to do besides taking legal action against individuals selling these boxes?

1) Lobby regulators to take a firm position on pirated content.
2) Block relevant IP addresses.
3) Anti-Piracy public awareness programs (Some providers may get little sympathy from their current and past customers).
4) Push KODI (XBMC) and Android developers to adopt DRM (Digital Rights Managment) thus enable streaming of legal content.
5) Develop a robust broadband offering to offset the potential revenue decline in their subscription TV service. (Dominate the BB Residential, Enterprise, and Government market spaces)

Sadly piracy is here to stay, remember Napster circa 1999. Has music piracy stopped? Bottom line operators need to quickly formulate strategies to address declining revenues resulting from customers cutting the cord, as somehow everyone loves the word free, even when all that glitters is not gold.

Editor’s note: The views expressed in this commentary are those of the writer, who is communicating in his personal capacity. All commentaries seek to provide personal analysis and interpretations of telecommunications themes in the Domestic, Regional, and International markets.