Cable Companies Lose Customers To Online Video, But Cord Cutting Still A Long Way Off

Cable Companies Lose Customers To Online Video, But Cord Cutting Still A Long Way Off

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Some reports say cord-cutting is a myth. Having recently moved into a place and assessed my options, I would agree, because the pay TV companies are keeping consumers hostage thanks to licenses with major sports leagues and premium channels like HBO. For example, the only way to get MLB baseball in Milwaukee, is to have either cable or satellite. Since blacks out the local team’s games when you’re physically located in the team’s market, you have no other recourse, aside from going to a bar or restaurant or to friends’ houses.

With the cord-assisted stranglehold on consumers in place, cord cutting is not proceeding anywhere near as fast as expected. However, many people have dropped services from those same companies in lieu of online substitutions. Netflix is claiming 24 million subscribers, Hulu should have topped a million this month. Granted, since most Netflix users watch films through the service, they are probably impacting DVD rentals more than they are cord cutting.

The Hulu Effect

So let’s look at Hulu. It’s made up of major TV networks, if offers watch anytime episodes of shows that air on regular channels as well as some other channels. So if the shows you want are on Hulu, then you don’t need to pay for that HD DVR cable box, which here in Milwaukee, is $10 more per month than a standard HD box. Any way you slice it, it’s more than Hulu by $2. But if you were to get whole house HD DVR which has 4 tuners so you can record three and watch one simultaneously, the hardware is $28 a month, or $20 more than Hulu, per month. Meanwhile, for $7.99, I can miss a half dozen shows or more a week (including a big chunk of prime time), not ever have to set a DVR, just a one-time, two-click add-to-my-queue dialog and boom, it’s all there whenever I want it.

Premium Content Still Far too Premium Priced without Online Only

Starz with On Demand is $12.99 per month, and they are also a content partner at Hulu. But most of what is available on cable is not on Hulu regularly. So it’s not as much a factor.

HBO doesn’t allow streaming of its content unless you have a pay TV subscription which is so backwards that it incited me to rant and rave in a yet-unpublished article here at ReelSEO that will probably never see the light of day.

Showtime does allow streaming of its content from its website, but very few full episodes and they really want you to subscribe. It’s all part of their ploy, get you hooked with an episode or two, then clamp on and drain money from your pocketbook regularly, even though something like 50% of the year they aren’t showing actual new episodes…

All three of those companies seem afraid to step outside of their traditional role, as piggybacking on cable systems to get their subscription money. I would think they would be able to charge less, make more profit and live a long and peacefully profitable life if they themselves were to cut the cord. In fact, if HBO or SHO were to offer an online-only package that was less than their cable-based offering and made them more money, I would probably get it for several months a year while I catch up on shows I like there.

Since they don’t, I have to imagine that they, like the recent statement about FOX’s 8-day delay of new episodes, are pushing piracy to perpetual continuity. So no complaining about that stuff until you’re ready to change your old fashioned ways and give us content how we want it.

Cord Pruning Put in ‘Park’

Parks Associates reported that 13% of consumers have done some cord pruning, snipping off branch services and overall monthly bills in lieu of online services, with another 9% ready to do so. They say around 3.9 million Internet viewers are in the mix there.

The Parks Associates report stated that providers should improve their on demand offerings. Frankly, Time Warner Cable has a pretty good one. Much of what I can watch on Hulu shows up there as well, but not all of it. So I still need Hulu and it still saves me money since I don’t pay for a DVR box.

Interestingly, Parks Associates stated that set-top boxes need to jump on the YouTube bandwagon and offer it through their service but honestly, I can’t see what that has to do with anything. It’s certainly not denting the cable service subscription rates.

They claim, in the report, that 11% of pay-TV households would pay $15 a month for the service. Personally, I’ll stick to my standard digital cable and $8 Hulu (still saving money apparently).

Alright, now I’m going to just discount the whole report in my mind, you can do what you want with the information. They ranked DirecTV as number one and AT&T number two for viewing experience. Obviously, they’ve never dealt with AT&T and never had a blizzard take down their DirecTV reception. I’ve experienced the latter but due to the long-standing, anti-consumer tactics and backing of anti-consumer legislation, am waiting anxiously for the government to break up AT&T, again, and am in complete boycott of the conglomerate. They’re moving in that same direction again, the mandatory government break up, we just need a non-corporate-owned government in power long enough to get that done.


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