I've put together my theory on the relative value of various types of TV content, and broken them down into four categories, and I think it makes cord cutting so much clearer for others who might not get it, and it shows how out of whack the industry is.
I would break the digital cable lineup into three categories:
1. Local channels
2. The "in-between" channels
3. Premiums, mostly HBO and Showtime
Now, with the advent of cord-stacking, we have OTT SVOD services, primarily Netflix and Amazon, as well as Hulu, and now some specialty services. So we can add a fourth category to the digital cable lineup (not a crazy idea considering a lot of cable boxes now have Netflix as an app):
4. OTT SVOD
So, then we can break down by what they each cost, on a marginal basis. Of course there are a variety of pay TV packages, as well as internet bundles, but I'm considering a pretty fully featured DirecTV package here for my comparison, including 4 HD DVR boxes:
1. Free via OTA ($300 in capital invested for TiVo)
3. $15/mo (HBO)
4. $14/mo (Netflix, assume Prime is free after paying $99/yr for shipping)
Now, look at what percentage each of those categories is for someone's viewership. This could vary quite a bit, especially for big sports fans, and could change season to season. In my case, before cutting the cord, I would guesstimate:
Now, break down the relative costs of each, and you can see why cord cutting makes so much sense. Is 15% of my viewership worth more than quadruple the price of the other three combined? That's how I ended up cutting the cord. That was on top of the continued decline in good content over the past few years on those "in-between" channels. John Stewart. Stephen Colbert. Mythbusters. All gone.
This exercise might be useful in persuading people to cut the cord, or if people are trying to decide whether to cut the cord. I think the vast majority of people with pay tv would be shocked when you break their viewership down in this clear of a way, and look at the relative value of those "in-bewteen" channels.