We've Cut The Cord!
Goodbye, Cable. Hello, NOI
It's been a long running tradition that a Cable TV service is part of the amenity package offered by Student Housing communities. Things, however, are changing. More and more consumers in every age group across the USA are either downsizing or eliminating Cable TV in their homes and apartments. Here are a few essentials to know about Cord Cutting.
There are several reasons for this trend: the high price of traditional cable and the insistence that consumers take 'bundles' containing dozens of worthless and un-watched channels; the wider availability of access to high speed Internet connections; the advent of new Internet based streaming services such as Netflix, Hulu and Amazon and the changes in viewing platform - the days of several people watching a single large format TV as a shared experience are numbered as more and more video is consumed on mobile devices.
Viewing habits are also changing - the one hour TV show with a time slot for one show a week is superseded by watching whole seasons in one go, mainly without interspersed commercials. At the other end of the spectrum, viewing time can be as short as five or ten minutes on YouTube.
So what does this mean for Student Housing owners and operators?
Firstly, you have to take a long hard look at your monthly expenditure on cable TV amenities, and ask whether it can be reduced or even eliminated. If your cable provider is the local cable company, you could reduce it by removing premium channels and programming. To reduce costs further, you'll need to drop cable in favor of a fixed channel distribution system from Dish Network or DirecTV.
Better still, you can take the plunge and eliminate the amenity altogether, joining many other cord-cutters.
What's the downside? You'd better make sure your Internet amenity is up to taking on the streaming burden.There may be some additional costs involved, but overall the costs will be lower than the savings from eliminating cable, and that can be a major NOI improvement.