With Netflix all but eliminating video rental stores, nationwide (with an assist from Redbox), and Hulu’s presence as an online television provider, has it also begun to force cable programming companies to re-think their strategy as well?
With HBO’s announcement last week that it would unveil a new monthly streaming subscription service, without the need of a cable TV provider, it has gotten people to ask themselves whether or not they really need cable anymore. Who can blame them? With the great original programming on Netflix, like House of Cards and Orange is the New Black, as well as up-to-date (besides the currently airing seasons) series of other popular television shows like The Walking Dead, Sons of Anarchy and The Following, it seems like a no-brainer for HBO to follow their lead and just charge a monthly subscription fee for those of us who just want to watch Game of Thrones or Boardwalk Empire every Sunday night.
According to an article on Yahoo Finance, Netflix doesn’t see HBO as a competitor looking to encroach on what they’ve created over the past several years, but rather, another player in the internet TV and movie streaming game. It’s no surprise that someone from premium cable realm is finally starting to follow suit. The only real surprise is that it’s taken this long. Few people know that Netflix was actually started in 1997, and has been going by the monthly subscription model (for physical copies of movies) with no late fees since 1999. Granted, their clout in the industry wasn’t as strong then as it is today, but it kept gaining steam. After their initial public offering (IPO) in 2002, and subsequently their online database for streaming, Netflix took off, leaving the likes of Blockbuster and their attempt at a competitive online service in the dust.
The forecasting research has been done to insist that this trend will likely continue into the future. Take a look at these graphs from the Wall Street Journal and Leichtman Research Group:
Since 2010, while there has been a decline in the number of cable channels being subscribed to, there has also been a significant incline in the amount of households that have at least one TV connected to the internet. While some may say, “those aren’t HBO, or Showtime, or another premium channel, currently you can only get those movie channels as an addition to your pre-existing cable subscription, so the decline in these very basic channels, is actually showing a decline in cable subscribers in general.
So, my questions to you are as follows…
Have you cut the proverbial cord in your television life, or are you just riding the wave until your hand is forced?
Is this move by HBO just the first domino to fall in the eventual elimination of cable TV as we know it today?
Sources:
http://www.businessinsider.com/reed-hastings-netflix-bloomberg-game-changers-2011-5?op=1
http://finance.yahoo.com/news/why-netflix-doesn-t-consider-214814516.html
http://marketrealist.com/2014/10/netflix-influencing-subscriber-loss-media-companies/
I think this post is very relevant and a good article. I currently only have HBO and Netflix at my apartment to save money. I would have all the cable or satellite channels if I could. The only complaint I have about Netflix is that the movies are a few years old. When I want to watch a more recent movie I have to go to red box or rent from a local movie store. Along with the TV channels I can sometimes stream them off the Channel provider website such as E! or MTV, but a lot of what I want to watch isn’t immediately available like it is on cable or satellite. Waiting around a week to watch the most recent episode which isn’t a big deal I just think there is room to improve on some of providers such as Netflix or hulu.
I totally agree with you about cable tv losing the game. Many people these days are relying on Netflix or Hulu to watch their favorite programs. One of the main reason is that it allows user to watch the show where they left it and and also watch it at their own inconvenience. Moreover, the online data base is huge and customers ca choose what they want to see. As far as cable i and HBO is concerned I feel that HBO is taking the lead in online streaming as well because due to smart phones and lap tops people can watch what they want online. They do not need to be home and sit in front of the tv for their favorite show to be aired at a particular time.
This post made me think about my current relationship with cable. I find that I barely ever find myself watching cable, usually when I want to see an episode or show, I head over to my netflix account or stream the episode online. Along with the lowest monthly charge offered, which is still extremely expensive, I am limited to only the most basic channels that I have no interest in. I can only dream of the day in which I will no longer have to deal with cable and the rude customer service that comes along with it.
This article was extremely interesting! I agree with the two posts above that cable tv is on the outs and could be completely gone within the next 10 or so years. It is more convenient for people to use Hulu and Netflix than come home at a scheduled time each week to watch their favorite shows. Personally, I still have cable at my house but it is more for the other members of my family. I never watch anything live and usually stick to HBO and Netflix whenever I have free time. In my opinion, we may see new providers, like HBO, joining the tv evolution and creating online databases where people can log on and watch their shows whenever is convenient for them.
The one thing I think cable is useful for, however, is sports. Maybe companies like HBO will allow you to stream games one day but right now I think turning on the tv at game time is more convenient. I think you can stream games off of ESPN.com and other websites so that is in the works, as well. I think it is all about preference and the kind of flexibility you have in your daily life.
This article is incredibly relevant to today’s television viewing structure. Many people, especially ones that are cost-conscious, have opted out of a regular cable package and into a more internet-based TV viewing system, like Netflix or Hulu. I, personally, have not cut the cord yet. I see where people are coming from, but I still like to watch some TV shows during their designated viewing time so that I can watch it in real time, but that’s just a personal preference. I don’t necessarily think that cable TV will go away altogether, at least not for a while. Cable networks want the revenues from commercials that are aired on TV during real time. Instead, I think more channels will offer a similar model as what HBO is offering: a supplemental internet option. It’s also important to remember that customers have to pay extra for HBO. Channels like ABC and NBC will have a more difficult time deciding which way to go and what to do during these changing times.
Interesting post! I agree with you and the above comments that cable TV is losing. From a personal standpoint, I downgraded to the most basic cable that Comcast offers. I found that I was not watching a lot of television, and I wasn’t happy with the price tag of keeping all the channels. Even with the downgrade, I really don’t watch cable. If I want to watch something, I use Netflix instead. I do think the HBO move will have a domino effect. I don’t think cable TV will be eliminated any time soon, but I think other premium channels will eventually follow in HBO’s footsteps.
Great post! I think that both Netflix and Hulu are making it easier for people to watch movies and shows on their schedule. From personal experience, I do not have time to watch a show when it airs, rather I watch it online or on Netflix. In addition, both services are cheaper than getting regular cable as well. I think HBO is providing additional options to online streaming, which in the future might downsize but not completely eliminate the cable industry.
I really enjoyed your analysis of the decline of cable and rise of subscription streaming services. I find it to be very true and relevant especially in the wake of the HBO announcement.
My family and I have not “cut the cord” yet. Not because we watch cable that much but because it is included for free with our internet service so we decided to keep it for a while though it is hardly used. We mostly stick to over the air TV. We do not have a standard streaming subscription at the moment thought that will probably be our first switch once the free TV offer expires.
I am not sure if HBO will cause the fall of cable but I think it is a stepping stone. HBO is a huge player so I think this is going to be a large blow to cable companies and may contribute to the fall though I think once at least one or two more premium TV companies switch to the streaming model that is when cables downfall will have a domino effect.
Such a good post to read! Cable is definitely losing it’s viewers to Netflix and Hulu. I currently no longer watch cable at home and only watch Netflix. There is room for improvement for Netflix, like updating the movies on there but I think with the low price it’s charging a month more people are going to cancel their cable and move over to Netflix or Hulu. It is not surprising that HBO has announced a streaming subscription service. I definitely see other channels doing the same thing because the streaming route has been so successful.
Great article, and quite timely. I have read a few articles recently on Yahoo news and The Wall Street Journal relating to this same topic. The more I read about it the more inclined I am to ‘cut the cord.’ With the amount of internet providers and alternatives to cable TV the options to ‘cut the cord’ are greater than ever before, and with more providers (HBO) offering services it will only become more accessible. I think I will be cutting the cord within the next few weeks and adopt one of the many internet providers. The price and shear amount of commercials on standard cable TV is outrageous, which is causing many to ‘cut the cable.’
I don’t know if cable will be completely cut out, although I hope it will, but I do think it will immediately affect their profits. As more and more companies are making it easier for consumers to choose what they want to watch without having to pay for what they don’t, it only makes sense to stray away from paying for cable packages. I personally watch a lot of sportscenter, which doesn’t offer this type of service, so I’m stuck with cable for the time being.
This is a very interesting article because I was just thinking about this the other day. Netflix, Hulu, and now HBO GO, have a tremendous amount of less overhead than traditional movie rental companies, whom subsequently are now bankrupt, like Blockbuster. Now, these film-streaming and rental companies are taking clients and profits from cable companies as well and quite frankly, I’m glad. Cable has remained largely unchanged for a long time, except with the introduction of DVR, and like all dinosaurs who do not adapt to changing times, it is now their time to retire. Besides, companies like comcast and Dish charge customers obscene amounts of fees and service charges for the most ridiculous reasons, only further pushing people away from their costly services and towards cheaper alternatives such as Netflix and Hulu. If traditional cable companies do not cut their costs, increase their margins, lay off workers, and revitalize their marketing/operational strategies, they will be in the dust in the wake of the new technological revolution.
Great blog post! I still have cable but I also have amazon prime which has a feature that allows you to watch movies and television shows. Honestly, the only reason I still have cable are for live events. The day that sports are broadcasted on netflix or amazon prime is the day that i cut the cord. I don’t think that day will come soon though because professional leagues are being paid billions of dollars for the rights to broadcast by television networks.
Interesting post, something that I have thought of multiple times myself. I personally don’t subscribe to any of these services, I just have cable. But I have to admit even then, I watch much of my television online for free. The biggest reason I have cable is for the sports. Until one of these services carries live sports, I won’t be buying any. And even then, sometimes we hear these services have issues. Good post.