The slow migration away from cable television to online-only options, like Netflix, picked up in 2011, with more than 1 million US TV watchers cutting their cable subscriptions last year alone, according to research (pdf) from Toronto-based Convergence Consulting. Despite this pickup in cord-cutting, researchers still say the days of Web-only TV remain far in the distance.
Since 2008, about 2.65 million people have switched from cable TV to Web-based options, concludes Convergence in its annual report, “The Battle for the North American Couch Potato.” Of those, 1.05 million cut the cord in 2011. Convergence believes the total number of cord-cutters will jump to 3.58 million by the end of 2012, meaning another 930,000 will drop their cable service this year.
As the number of people switching from cable or satellite TV to Web-based options increases, the number of new traditional TV subscribers has fallen off a cliff. Convergence research shows that cable and satellite companies added a mere 112,000 TV subscribers last year, a significant drop from the 272,000 who added cable and satellite TV service in 2010. However, Convergence’s estimated TV subscriber additions are a fraction of what other research shows. According to a study by the Leichtman Research Group, the number of new cable and satellite subscribers in 2011 was around 380,000.
Even if Leichtman is right, and Convergence’s estimate is far too low, things still don’t look good for cable and satellite TV business. By Convergence’s count, the number of added cable and satellite subscribers from 2000 to 2009 was about 2 million, on average — nearly 18 times more than last year. Convergence estimates that about 185,000 will sign up for a cable or satellite subscription this year.
Cable and satellite businesses aren’t the only ones facing an uphill battle. As Convergence notes, most of Netflix’s business is in “previous season” TV shows, meaning people still can’t get the same content they get from traditional television service, or at least not as soon. Additionally, Netflix’s saw its programming costs “skyrocket” in 2011, and this year, the cost of licensing content will remain “very high,” the researchers say. The only way to overcome these debilitating costs, says Convergence, is for Netflix to achieve “significant” subscriber and revenue growth — a veritable catch-22 for the streaming company, as the addition of new shows and movies is necessary to bring on more customers.
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This article talks about switching to web-based options, as if there is no TV other than cable or satellite. If you live an area where you can receive broadcast TV signals, do yourself a favor and dump your cable. Get a quality antenna (I have amplified rabbit ears in my attic) and receive FREE HD programs from the major networks: Fox, CBS, ABC, NBC, PBS, etc. plus all of the other sub digital stations that come over the air. Buy a tuner card for your computer, hook it to your antenna, connect the computer to the TV via a HDMI cable and you have a DVR to record programs via Windows Media Center. The DVR programming guide is supplied FREE by Windows Media Center (why do people still buy TiVo?). Your guide will download each day via an internet connection. Record to an external 1TB drive and you can take your shows (250+) with you to watch on your company laptop on the plane when you travel. Any content on the web (free or rental movies, etc.) can be viewed on your TV using your computer– think of your TV as just a giant monitor. Unless you are a complete TV addict who is willing to pay big money for a few specific programs, go with over-the-air TV. You’ll never go back.
I also want to point out that the ala carte argument is a dumb one. Even if you paid $5/mo for each channel you wanted, you are still limiting yourself to 5-6 channels at $30/mo. That’s EXPENSIVE in my opinion and the same price as basic cable which gives you more channels.
With that being said, I do think there are people out there that simply do only care to watch a handful of channels, so maybe that will work for them. It’s not a “better” choice like they keep preaching, it’s just the choice that works for their lifestyle. Don’t push it on me though! :)
I looked at it from the reverse point of view Ian. I was previously paying upwards of $80/mo and only really watching 5-6 channels. THAT’s expensive on the basis of per channel watched! Basic cable in my area is more like $50 or $60 per month excluding extra fees for HD and DVR. The $25 package is local channels only, which I get via antenna for free.
Bottom line, I cut the cord two years ago and am doing just fine with an antenna, Windows Media Center, and Netflix.
Different strokes for different folks!
Sorry, but I don’t think there is enough content out there on alternative platforms like Netflix or Hulu to justify getting rid of cable TV. I don’t know about most people, but I have an HDTV in my house larger than 19″ and anything from Netflix or Hulu looks like crap on my TV.
Oh, I forgot to mention, you can’t get most live sporting events on Hulu or Netflix, news from CNN or Fox etc. What about the HGTV channel or Discovery? If you want older episodes maybe.
And Netflix’s streaming library is terrible. I mean really, who wants to watch old episodes of canceled TV shows? And their HD selection is horrible.
Sorry folks, no way am I buying the argument that alternative sources are better than cable TV.
I agree. I would love to cut my cable service, but there’s just too much that it offers that I don’t want to miss out on. Also, my main problem with services like Netflix and Hulu is that I have to decide what to watch — you don’t get that lazy Sunday, channel surfing experience that you get with cable or satellite. And that’s one of my favorite features of cable — sometimes you just want to veg out! I really like Netflix as an additional service. But it’s not enough by itself.
I couldn’t agree more. Look, I can afford to pay for HD cable, it’s not cutting into my expenses too deeply and quite frankly, I like the product they offer. My wife gets the content she likes and so do I. It’s worth the money for me.
If there was a way to get consistent and live news and sports channels in an online capacity, I would definitely cut myself off of cable. When it comes to catching new shows in real time, Hulu pretty much has everything I need covered. I think the only cable channels I’d miss at this point are IFC and Sundance, but even those guys are just recycling the same movies week after week.
Also, I think Netflix’s library gets way too much crap. While it isn’t jam packed with recent content for the casual film/tv viewer, for cinephiles or people who just love weird obscure content their selection is pretty deep once you dig around. They’ve almost got the complete Criterion Collection, which is stacked with great stuff.
Wow! Speaks a lot to where we’re headed as a digital society!
Cable and satellite will still have a smaller market centered around older folks who don’t understand or don’t subscribe to the internet, or folks that can afford to blow the money on cable/satellite.
Good to see Americans wean themselves from their tv sets, even though a lot of that eyeball time is redirected to computer screens or mobile phones…
I haven’t had a reason for cable for almost 5 years now besides the occasional sporting event. But now I have the option of bars and today even most live sporting events find their way to an online stream.
Cable will continue to hold on for a little while longer, but as online options continue to grow their programming, cable’s grip will continue to loosen
But unless the stream is on ESPN3, the streams are usually super buggy and more of a headache than anything.
Yea most of my fave shows are on netflix and its much much cheaper
People are dumb, but not idiots. Cable TV and satellite have gone the way of the old TV networks; it’s not called the idiot box for no reason.