Cutting the Cord: The Future of Television

Industry Posts

Cutting the Cord: The Future of Television

 

Times…they are a changing. The days of the traditional cable provider is declining, and consumers are relying on streaming services as their primary source of content, or cord cutting. What is cord cutting you may ask? It is where people ditch their traditional, all-inclusive cable packages and rely on à al carte services like Netflix, Hulu, and HBO Go, to bring their desired content straight to their television. As of fall 2014, about 6.5% of American households have “cut the cord”, up from 4.5% in 2010. Additionally, 15% of Americans are considering ditching their pay-for-TV service. Driving this trend is the simple concept of economics.

Americans have begun to figure out that they are paying for more than they want. In 2013, the average American cable subscriber received 189 channels, yet, only watched 17. To combat this, cord cutters are just paying for Netflix, where they can get most, or maybe all, of the shows they watch. So let’s assume that the average cable subscription is $90 per month, you could save by paying just the $8 per month for Netflix. Even if you added on Hulu Plus, which would only be about $10 per month, you will still be way under the average cable subscription. Saving about $70 per month seems like a no brainer, so why isn’t everyone doing it? Sports.

We all know that the only real way to watch sports is live. Because of this, sports fans are clinging to their subscriptions. Sports fans should actually be appreciative of the subscription because it essentially helps them out. Like we previously mentioned, the average subscriber receives 189 channels and only watches 17. The average station costs about 15 cents, but not ESPN. ESPN cost $6.04 per month and is the single most expensive channel included in a cable subscription. (This excludes premium channels like HBO and Showtime, which do cost more, but are not automatically included in everyone’s cable package.) So this means that your Aunt Ethel that only watches Lifetime movies, she still pays $6.04 per month for you to watch College Gameday.  The sports conundrum doesn’t just end with ESPN. There is currently no easy way to stream live NFL, NBA, or MLB games. However, in early January, Dish announced a new streaming service called Sling TV that costs $20 and includes a small package of channels, notably ESPN.

The economics of cord cutting have always been around. Since its inception, Netflix has always been cheaper than a cable subscription. So why has cord cutting become so popular recently? Our guess is that technology has finally made it convenient to stream content onto preferred platforms like your big screen TV. In the early days of streaming, watching The Office was limited to your smartphone, tablet, or computer. Now, Smart TVs come equipped with wireless connectivity, so you can view the antics of Dunder Mifflin employees in full high definition on a 55-inch screen.  Don’t want to invest in a Smart TV? No problem. There are many ways to easily and affordably stream your favorite content to your TV. Google’s Chromecast and Amazon’s Firestick are both extremely cost efficient at $35 and $40 respectively, and they simply attach via your TV’s HDMI port.

With the rise of these streaming platforms, streaming services have done an incredible job of upgrading their user interfaces that make playing your favorite movie or show even easier. Additionally, we have seen them integrate new features. For example, Netflix now automatically plays the next episode of the series you are watching, which has given rise to the term “binge watching.” It’s like they knew you didn’t want to be productive for the day, or maybe even the week.

Over the years, Netflix and Amazon Prime have gone from streaming a handful of movies to replacing movie retailers like Blockbuster. Now, they are investing in creating their own content. Netflix’s House of Cards and Orange is the New Black has been well received by both the public and the award circuit with both winning Emmy’s. Not to be outdone, last week Amazon announced that high profile director Woody Allen was commissioned to direct a new yet to be named series.

So, will this trend continue? We certainly think so. With new streaming services like Sling TV and HBO’s coming standalone service, it certainly seems like content will continue to be provided and make cutting the cord more and more worth it. It is worth noting that the debate on net neutrality will play an important role, but for now it seems the cord cutting trend is here to stay. Not sure how to get started on cord cutting? Check out this nifty tool and check all your options.

 

Times…they are a changing. The days of the traditional cable provider is declining, and consumers are relying on streaming services as their primary source of content, or cord cutting. What is cord cutting you may ask? It is where people ditch their traditional, all-inclusive cable packages and rely on à al carte services like Netflix, Hulu, and HBO Go, to bring their desired content straight to their television. As of fall 2014, about 6.5% of American households have “cut the cord”, up from 4.5% in 2010. Additionally, 15% of Americans are considering ditching their pay-for-TV service. Driving this trend is the simple concept of economics.

Americans have begun to figure out that they are paying for more than they want. In 2013, the average American cable subscriber received 189 channels, yet, only watched 17. To combat this, cord cutters are just paying for Netflix, where they can get most, or maybe all, of the shows they watch. So let’s assume that the average cable subscription is $90 per month, you could save by paying just the $8 per month for Netflix. Even if you added on Hulu Plus, which would only be about $10 per month, you will still be way under the average cable subscription. Saving about $70 per month seems like a no brainer, so why isn’t everyone doing it? Sports.

We all know that the only real way to watch sports is live. Because of this, sports fans are clinging to their subscriptions. Sports fans should actually be appreciative of the subscription because it essentially helps them out. Like we previously mentioned, the average subscriber receives 189 channels and only watches 17. The average station costs about 15 cents, but not ESPN. ESPN cost $6.04 per month and is the single most expensive channel included in a cable subscription. (This excludes premium channels like HBO and Showtime, which do cost more, but are not automatically included in everyone’s cable package.) So this means that your Aunt Ethel that only watches Lifetime movies, she still pays $6.04 per month for you to watch College Gameday.  The sports conundrum doesn’t just end with ESPN. There is currently no easy way to stream live NFL, NBA, or MLB games. However, in early January, Dish announced a new streaming service called Sling TV that costs $20 and includes a small package of channels, notably ESPN.

The economics of cord cutting have always been around. Since its inception, Netflix has always been cheaper than a cable subscription. So why has cord cutting become so popular recently? Our guess is that technology has finally made it convenient to stream content onto preferred platforms like your big screen TV. In the early days of streaming, watching The Office was limited to your smartphone, tablet, or computer. Now, Smart TVs come equipped with wireless connectivity, so you can view the antics of Dunder Mifflin employees in full high definition on a 55-inch screen.  Don’t want to invest in a Smart TV? No problem. There are many ways to easily and affordably stream your favorite content to your TV. Google’s Chromecast and Amazon’s Firestick are both extremely cost efficient at $35 and $40 respectively, and they simply attach via your TV’s HDMI port.

With the rise of these streaming platforms, streaming services have done an incredible job of upgrading their user interfaces that make playing your favorite movie or show even easier. Additionally, we have seen them integrate new features. For example, Netflix now automatically plays the next episode of the series you are watching, which has given rise to the term “binge watching.” It’s like they knew you didn’t want to be productive for the day, or maybe even the week.

Over the years, Netflix and Amazon Prime have gone from streaming a handful of movies to replacing movie retailers like Blockbuster. Now, they are investing in creating their own content. Netflix’s House of Cards and Orange is the New Black has been well received by both the public and the award circuit with both winning Emmy’s. Not to be outdone, last week Amazon announced that high profile director Woody Allen was commissioned to direct a new yet to be named series.

So, will this trend continue? We certainly think so. With new streaming services like Sling TV and HBO’s coming standalone service, it certainly seems like content will continue to be provided and make cutting the cord more and more worth it. It is worth noting that the debate on net neutrality will play an important role, but for now it seems the cord cutting trend is here to stay. Not sure how to get started on cord cutting? Check out this nifty tool and check all your options.

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