Will Streaming Ever Replace Cable?
A Charter Spectrum cable internet installation vehicle in West Lake Hills, Texas. Photo via Wikimedia Commons
If there is one issue that we could get bipartisan agreement across every demographic in America, it would be hating our cable company. And yet, they’re still in business.
For years, we’ve been grousing about our expensive cable packages. If only we didn’t have to pay for all those channels we never watch, then it would be so much cheaper! Some misguided individuals even suggested that the government should get involved to force cable companies to give us what we want: a la carte service. Still others hoped that the free market would solve our problems. The advent of streaming gave people hope that we could at long last be freed from the tyranny of the cable bundle. Sadly, for most of us, the dream goes unfulfilled.
Maybe I’m an outlier (I usually am) but until recently I just LOVED my cable company. When I was still married to my ex-husband, we were one of those rare families that actually got our money’s worth out of it. We watched “Covert Affairs” on USA, “Major Crimes” on TNT, “Doctor Who” on BBC America. I watched way too many shows on ABC Family for someone without a teenage daughter. He watched every WWII documentary on the History Channel. I watched sports, he watched cooking competitions. We didn’t even need premium channels to find movies and old TV shows to watch. Sure, it was expensive. But, like I always told my ex, it was cheaper than divorce lawyers. After all, cable may be $150 a month, but those lawyers charged us $300 an hour EACH.
So now, I have less money and less need for all those channels. I also don’t watch more than one screen at a time. Surely, I could save some money by cutting the cord. I started researching, but couldn’t find a package that I liked for any significant savings. YouTube TV had all the sports channels I wanted, but I didn’t like the way it worked. Hulu doesn’t have the SEC Network. None of them offer Hallmark Movies and Mysteries (and neither does Hallmark’s streaming service.) I ended up renegotiating my cable deal. What grinds my gears is that the bundle is reasonable, but they charge an extra $10 a month for HD service (shouldn’t that be standard by now?) and $10 for each receiver box (which I should have also paid for by now considering how long I’ve been a customer). Also, I have to pay so much extra just to get sports AND the one cable channel that I actually want to watch.
I have a theory about why we hate the cable bundle so very much. It’s not just that we’re paying so much money. It’s not even that we’re paying for channels we don’t want. It’s that we’re actively subsidizing stuff we hate. The most obvious example is cable news. I know quite a few liberals that would actually pay MORE money for cable if they would take Fox News off the air. And plenty of Republicans that would like to get rid of every channel with “NBC” in its name. Guys hate paying for the Oprah channel and Hallmark. People who don’t like sports have the biggest complaint because ESPN and all of those sports channels make up the biggest chunk of your package price. And why are any of us paying extra for PBS? Isn’t it bad enough that our tax dollars support it? I can’t even get my local affiliate to broadcast the great performing arts programs that they get in other parts of the country so WHY AM I HAVING TO PAY FOR THIS????
It’s especially hard to justify those high cable bundles when there’s a streaming service to cater to every niche viewer. Why worry about PBS when I can subscribe to the Metropolitan Opera on Demand (for just $15 a month). You love those British shows? Try Acorn or BritBox. DC has its own streaming service. Until recently, live sports was a big deal breaker in the cord cutting discussion, but now many streaming services offer sports. But there are a lot of channels and you have to search to find a service that carries the channels that broadcast your team. And if you DO find it, it might cost your what you’re paying for cable.
This year, the streaming wars are kicking into high gear. Disney + debuted last week to great fanfare. CBS has its own streaming service, and NBC launches its service next year. Now that the market is flooded with options, each service has decided that its path to victory is with original and exclusive content. This is going to be bad news for the grandaddy of all all streaming services: Netflix. It’s losing all of its Disney, Marvel and Star Wars content to Disney+ and its most popular show “Friends” to the new HBO Max (that is also launching next year.)
HBO Max may be one of the most expensive services, but it would be a bargain for me. This is where the dreaded bundle comes back into play. My cable company starts off with a basic family package at $49.99 a month (before discounts.) If you want the sports packages, you have to upgrade to the $69.99 bundle. But an extra $20 a month is probably worth it if you’re a sports fan. To get my Hallmark Mysteries channel AND sports, I have to upgrade to the $74.99 a month plan. And if I wanted HBO, I’d have to upgrade to a plan that’s a whopping $124.99 a month! Or, I could just get HBO Max for $14.99 a month. That’s a no brainer. So, how will that effect the overpriced cable bundle? How many people actually WANT all those extra channels you get along with HBO? Why not just get the streaming service and watch WHAT you want WHEN you want?
The big question for 2020 will be just how many streaming services can the market support? Will CBS All Access and Peacock be worth paying extra for? Is anyone watching Apple +? Will all these new services put Netflix out of business? Will people subscribe long term, or will they switch services every month or so? Just how much TV do we want to watch anyway? Will people be willing to sacrifice more channels to save money? Or will we end up going back to that cable package that we hate so much now?
They’re going to find that binge-watching has changed things. Get Netflix for three months. Binge the crap out of it. Dump it. Pick up Disney+. Binge the crap out of it. Dump it. Pick up DC. Binge the crap out of it.
The big gift card of the future won’t be Amazon. It’ll be a card for one of those little niche channels. “Oh, thanks! I’ll save this gift card for March as part of the buildup to WrestleMania!”Report
Yeah, that’s pretty much MY plan.Report
I think Disney+ is onto you, because The Mandalorian is dropping one ep at a time. I mean, I guess of course you could wait until the whole season is out and binge that, right?Report
Darn straight you can wait. Very liberating is the realization that you don’t have to watch the hot new thing this very instant. If it is good, it will still be good in a few months. If it actually isn’t all that good after all, this will be more apparent in a few months. Patience saves both money and time wasted on over-hyped crap.Report
I’m planning to binge-watch The Wire after all these years.Report
The problem with this is that it’s easy to forget to cancel. I wonder if there’s money to be made in a third-party service that manages all your auto-renew subscriptions and cancels them according to a schedule you specify.Report
Hence the beauty of the gift card.
Two week free trial? Not enough. Perpetually charged until your credit card gets stolen/expires? Too much.
Three months from a gift card? Aaaaaaaah. Just right.Report
Back in 1985 the cable company said I still owed them $14. That pissed me off, so I refused to get cable until last year when it came bundled with the apartment I rented. If you add up 33 years of cable bills (about 400 months) that’s a whole lot of money they didn’t get from me. I’d be curious to know what their demographic profile says about people like me.Report
Short answer: no. (And not just because of Betteridge’s law of headlines.)
There are a surprising number of cable customers who walk into the local office and pay their bill in cash each month. TTBOMK all streaming services require a credit card. Also so far as I know, the majority of them require you to commit to paying for an extended period up front (well, Amazon Prime will let you go month by month). At the cable office, you will hear customers who are paying their bill also say, “No HBO next month, things are tight,” and the clerk takes care of it for them.
There are a surprising number of cable customers who are happy that the cable company bundles the acquisition and user interface for all those different packages. They don’t want to work their way through figuring out which streaming service(s) they need in order to watch both the Big 10 Network and North Woods Law.
Local advertising needs video delivery and eyeballs. The cable company makes it easy for them. Two-thirds of the eyeballs watching local over-the-air broadcasts watch it on cable or satellite because it’s easier than an antenna (and is included in the unified UI). This is not a service that a streaming company, one of whose “advantages” is no advertising, can provide.
When I worked for <giant cable company> I was one of the few who stood up at industry conferences and said, “We can provide the best TCP/IP delivery pipe to most customers. As equipment costs fall, we can price it so that people find it meets their needs and we make a handsome profit.” Who here is paying their cable company, and how much, for the TCP/IP service that delivers their streaming content?
Add ’em all up. Cable companies aren’t going away. Their services may change, but they’re in it for the long haul.Report
They still are losing market share. I’m not sure how bad the bleeding is these days, but it’s not nothing.
Eventually it’ll level out to a new normal.
Of course, cable still has to overcome a reputation of poor customer service and hard sell tactics as well.Report
In terms of video service, cable companies are second-level content aggregators (networks are first-level). I’m willing to bet that in ten years, the cable companies will be second-level aggregators for streaming services. It’s already started. Comcast’s set top boxes will provide access to at least Amazon Prime and Netflix streaming content as well as Comcast’s own video-on-demand service. If you are a data-only customer (above the poor folks’ service) they’ll give you a Roku-like box that will organize content from multiple streaming services. Both work with their voice-activated remote.
To one of Merrie’s other points, things will still be bundled. “I only want Disney+’s Loki series; why do I have to pay for all that animated junk?”Report
The bundling is why I am not tempted to return to cable. We subscribe to three services, plus three add-ons onto Amazon. This is, in my opinion, unnecessarily excessive, but there are shows my wife wants that result in this. It is still vastly cheaper than our cable bill, back when we had a cable bill. I don’t get some football games I would like to watch, but I find myself enjoying watching the game in a bar. If we include the bar tab in the effective price I pay for viewing entertainment, that brings it up to about what I was paying for cable, but only during football season. And this way I give food and beer, too.
As for the future new normal, my tween kids don’t watch TV much. They watch YouTube videos in vast quantities. My older just got a Nintendo Switch for her combined birthday/Christmas present. I assume that will command a huge percentage of her attention, at least until the novelty wears off. But sitting and watching a scripted TV program? That is barely in their consciousness.Report
To the point regarding multiple set-top boxes and paying fees: Some cable providers have an app that runs on the Roku stick and lets you access both their video feed and your DVR box; this means you only have to buy the Roku stick instead of needing multiple set-top boxes. (You do need wifi to stream to the Roku.)Report
I should add that my comments are directed at how content will be bundled. There’s little question but what eventually all video will be delivered over TCP/IP. Along with everything else. Cellular service is almost there already: 4G and 5G run everything — voice, video, data — over TCP/IP. Worth mentioning that TCP/IP was designed to run on all sorts of different physical layers: Ethernet, T1, DOCSIS in a cable system, carpet static,…Report
Hey, Merrie! Thanks for this piece. It was a good and timely read. The guys at South Park had an episode this past week that dovetails perfectly with this called “Basic Cable” that dealt with streaming. I hope you have a great Christmas! I also hope a good streaming service comes online that offers a sports/news package!Report
Thanks for the heads up! I’ll have to watch that one.Report