Cutting the cord has been a phrase on the tip of our tongues for many years now. Ever since Netflix, Hulu, and similar services allowed people to watch shows on-demand, cable consumers have steadily considered cutting the cord and going with much cheaper streaming services than bloated cable packages. The transition from a mobile and streaming centered service has been bumpy, fraught with companies doing their best to either stick with the past or doing their best to catch up. Let’s get into the business model and see what some companies are doing in response to this growing threat to traditional cable.
Abundance of Providers
During the early days of cord cutting, there were only a few providers to choose from. Did you choose Netflix for its superior selection of shows and movies? Or, did you put money on Hulu for its significantly larger choice of TV shows? There were other smaller choices like Amazon Prime with a bumpy reception from most users, but in general, the choices were few and only provided on-demand content.
While on-demand is great, most consumers love live TV. They want to be surprised by a new show, or they want to reminisce over favored old shows and movies. There’s something magical about live TV, so it was no surprise that the path towards cord cutting was fairly slow during the on-demand days. Most people used on-demand services as a supplement, not a complete replacement.
However, the slow transition towards streaming live TV has become a reality, and it’s gaining traction in terms of availability and number of customers. Consumers can now choose from YouTube TV, Hulu Live, PlayStation Vue and Sling TV. These products provide relatively cheap streaming with a good number of channels.
For those who want a cheaper bill, don’t mind sacrificing a few channels, or demand more streaming options on mobile devices, this has become the easy winner over traditional cable with its large bills, an abundance of unwatched channels and unnecessary contracts with terrible terms.
Smash the Competition
There’s one thing that cable companies currently have over streaming companies: channels. This is considered a major problem my many subscribers. Some streaming providers will have certain channels while others will have those few extra channels you really want, forcing customers to shop around or buy multiple plans.
Companies like DirecTV are pulling their resources and creating their own streaming platforms. They are making it easier for people to watch live TV through their mobile devices. While they still sport a large bill, those who just want to see their shows wherever they are will definitely be satisfied by this response.
This represents a response that shows a cable company willing to listen and adapt. While it still has some of the serious problems that traditional cable is known for, it’s willing to appease customers and understanding their evolving needs.
Join the Competition
Some content providers, primarily Disney and Viacom, are joining the competition and throwing their investments as wide as possible. For anyone who has used Netflix or Hulu, this probably isn’t a surprise. You often see their shows on-demand, which gives users a lot of shows and variety. However, they have gone the extra mile and are signing on with many live TV services to get their content on as many lists as possible.
While they won’t be breaking the agreements with traditional cable companies anytime soon, they are investing in an obvious change in the industry. Even if favor goes back to the traditional companies, these content providers won’t lose anything because they are still playing both sides for as much profit as possible.
Considering that cable companies are becoming more stringent than ever they might soon ask these companies to join a side, it likely won’t be for a while.
Paring and Locking Down
This adaptation that seems to be sweeping cable companies is both a boon and bust for customers depending on their preferences. One of the biggest complaints with cable, second only to cost, is the massive number of channels customers are forced to pay for. In general, most cable consumers will only watch a fraction of the channels available to them. While it might be great to have hundreds of channels, most people would get rid of them to lessen their bill.
So, one response to this has been to provide smaller packages that are more targeted. Many cable companies (and even live TV providers) are giving customers more control of what channels they pay for. While they still can’t quite pick and choose, it’s now much easier to get just what you want with only a little bit of bloat.
Another response is locking down content to force people to stay with traditional cable. Time Warner (now Spectrum) and Viacom, who are both signed up with on-demand services, are trying to not-so-subtly sway consumers back to cable. They have largely canceled same-day streaming of their new shows and episodes. If you want to see the newest episode, then you have to pay for cable.
This response isn’t great for customers and has led to a lot of annoyance. While it’s working to a degree, it’s fighting against the trend and shackling customers to their demand for new content.
Not to bring up Spectrum again and how it seems to go against customers, but perhaps the worst response to live TV streaming is pumping up bills. Even though Spectrum has lost some subscribers, they are posting more revenue because they are charging customers more for the same service. While this is helping them make more money, this will likely be a short-term boost with long-term consequences.
There’s no denying it. Live TV streaming has caught the attention of cable consumers and money is definitely leaving the hands of traditional cable companies. While it will be a long time before cable companies are on the brink of devastation, they are at a point where they must take notice and adapt. Some are adapting well, others are flopping and doing the worst possible. But regardless of their adaptation, it’s now obvious that a new age of TV of coming, and it won’t be long before the lines of who’s popular and who’s fading away will change.