Business Take: Is Cord-Cutting a Threat to Cable?

The media love to write about cord-cutting, but is it actually happening and could it change how people watch TV?

May 11, 2014 at 7:36AM

The day after celebrating his 29th birthday Business Take host Jason Hellmann sits down with Fool contributor Daniel Kline to discuss Hellmann's decision to be a cord-cutter -- someone who chooses to not subscribe to cable. 

Hellmann and Kline kicked off the second episode of Business Take, the show that gives you the Foolish perspective on the most important business stories of the week, by examining whether cord-cutting makes sense and whether it's something that will actually impact the business of cable providers.

"I just don't watch live TV anymore," said Hellmann, who explained that subscriptions to Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN) Prime, and Hulu gave him more than enough to watch while over-the-air channels allow him to follow the National Football League and a $120-per-year subscription to MLB TV gives him access to every single baseball game aired during the year.

After a spirited debate on Hellmann's decision to not have cable and Kline's shock at how anyone could go without every possible TV option available, the two moved into the current reality of the cord-cutting movement. Kline explained that while cable subscriptions (a broadly defined term including satellite and phone company pay television providers) fell for the first time in 2013, cord-cutting has been more media speculation than actual practice.

"It's a youth trend," Hellmann said. "Anyone over the age of 45 is not doing this, but everyone I know has considered it."

Kline, 40, described himself as being in the tweener group age-wise that would consider cutting the cord, but finds that while it's possible to get most content, you have to go too many places to do so. He cited Amazon's Fire TV as a possible source of making disparate streaming content easier to navigate and manage.

"Fire TV is voice-activated.... You can say 'Brad Pitt' and it gives you every Brad Pitt movie, or you can say 'Fred Flintstone' and it brings up every option whether it's a rental from Amazon or airing on Kindle," Kline said. "At the point where a hardware device like Fire TV or some other service makes it so I can say 'Boston Red Sox' and it shows me that there is a game tonight or here is a DVD of the championship seasons ... that's when cord-cutting makes sense."

Have you cut the cord? Are you thinking about doing so? Share your thoughts on the subject in our comments section.

Daniel Kline has no position in any stocks mentioned. Jason Hellmann has no position in any stocks mentioned. The Motley Fool recommends and Netflix. The Motley Fool owns shares of and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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