In its early times, cable television slowly pushed aside over-the-air broadcast TV until no customers were left for this first streaming technology. Now it seems to be the time for cable television to feel the pressure of online TV and Internet streaming services until it will probably go into oblivion itself. Or will it?
Cable television emerged in the 1950s, and it currently functions via digital transmissions (that replaced analog transmissions completely in many regions of the globe). The U.S. transitioned to exclusively digital broadcasting in 2009.
The customers that choose to renounce cable TV in favor of online services are called “cord cutters”. They usually prefer Netflix as an alternative (73 percent), Hulu Plus (59 percent) and Amazon Prime (44 percent). In order to keep their remaining customers or even hoping to get some of them back, cable providers enter the less expensive a la carte online TV services market: pre-established bundles of channels offered via Internet to willing customers – the way Comcast launched in June 2015. In March 2016 Amazon Cable Store started to include Comcast’s Internet and television services in fixed bundles/prices, a move that shows that Comcast felt it needed a leads generation partnership with a more experienced online peer.
In order to gain some perspective on how cable became obsolete while Internet TV gained traction, check this Huffington Post feed of articles on this topic.
The benefits of online TV streaming services
- Less expensive overall costs (in most of the cases);
- A different, customizable viewing experience where clients express their preferences and receive notifications and/or recommendations based on their previously-watched programs and manifested preferences;
- Improved flexibility and administrative flow; streaming services do not require sign-up or termination fees and the subscription and cancellation formalities go through faster than in the case of cable TV since the gear or access confirmation is easier to handle;
- Mobility: customers can watch streaming Internet TV on the go, as long as they have a suited device and their login credentials;
- Since this type of TV is on the rise, there are often deals and offers for the potential clients: free trial periods, promo prices, successful TV shows that come at a discount and innovative ways of attracting even more enthusiasts at the horizon; it is always better to catch such an uprising curve than to suffer the effects of a business that is worried about losing its customers but refuses to make radical offers or revolutionary changes because its purse strings are already tightened.
Disadvantages in using Internet-only TV streaming services
- The entire offer depends on the customers’ Internet connection and reliability; since the providers are different, the TV company is not liable for the quality of your Internet connection in case it is too weak or interrupted;
- The absence of some programs from the streaming services’ portfolio or the delay before such programs can be found on your streaming service of choice; successful shows can agree on exclusive terms with one of the services, which means that customers won’t be able to see that particular show on any other online TV “channel”; others sign upon waiting periods before their show goes online, which means the customers have to wait, sometimes more than a yearlong;
- Advertising is omnipresent since the streaming companies try to boost their revenues this way, in order to be able to keep the monthly fees lower;
- Fees and limitations when it comes to multiple streams, which makes it difficult to please each member of a large household with just one subscription; it usually takes a higher subscription to ensure that each can watch his/hers favorite show on its own device; (of course you will also need a qualitative Internet connection and compatible gadgets, too, but that is somehow implied when considering Internet television);
- Possible clashes with your Internet provider’s data caps: if the Internet agreement does not provide unlimited access, watching online shows must just drain your monthly access sooner than expected, following which the available reduced data rate will not support video streaming.
- Being prone to all possible Internet connection issues, from power outages, to bad connection and cyber-security issues.
Tendencies in TV programs provision
While on the customers’ side the average user tries to keep both its cable TV service and Internet TV, in order to have access to as many shows as possible and avoid the disadvantages of exclusively relying on one of the two, the provider companies manifest two tendencies:
- Streaming Internet TV services take on cable and materialize their plans of offering live TV services (see Hulu’s announcement for 2017, or Amazon’s comments in 2015 on how they are considering a premium subscription service that would come with access to live television channels; meanwhile Netflix is flirting with the idea of live transmissions for over a year now, while it becomes clear that diversifying their services is directly proportional with the raise in popularity in the case of Internet TV providers; more tiers equals more types of attracted customers;
- Cable TV providers or broadcasters find ways of going online and offer streaming versions of their shows for their subscribers (see the example of Comcast and other channels that have launched their own Internet video players).
Therefore, while the specific market is going through a mixed phase where both tendencies intertwine, it seems that a hybrid solution might be the right answer to the modern customers’ needs. The existing companies might survive and even thrive if they steer carefully through these diversifying and expansion times, while there is definitely place for new, fresh appearances that might come with the right formula from the start.
