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Cutting the cord with cable TV

A guest post by Matthew Scherer of DataBeans.net

Cable television traces its origins back to 1948, and the basic model has surprisingly managed to stay very relevant since then with the addition of a few key features, such as HD content, over the past few years. But cable’s days as top dog may soon be numbered.

In the U.S., The Globe and Mail recently reported that in the second quarter of 2010, the cable television industry lost 216,000 subscribers. In the third quarter of 2010, subscriptions fell by another 120,000. This basically nullified the 346,000 cable tv subscription rise that occurred in 2009.

In fact, according to the market research firm SNL Kagan, six out of the top eight global cable providers have all reported their worst quarterly subscriber losses to date sometime this year.

So, why the sudden change?

Well, aside from the standard “poor economy, means poor consumer spending” excuse, the options for a better, cheaper, and customer tailored service are out there and widely available.

Hulu Plus, which allows for streaming full television series and movie content, on Internet connected TVs, Blu-Ray players, or the Apple iPhone 4 or iPad, announced earlier this month it would drop its subscription price from $9.99 a month to $7.99 a month. In response, Netflix also announced in November a “streaming only” payment plan option with a fee of $7.99 a month beginning in 2011.

What’s more, content that was once considered exclusive to the realm of traditional television, including news and sports suddenly isn’t so exclusive any more.

In early November, the Xbox360 marketplace added the ESPN channel, and selecting it allows you to watch live and past sports coverage in HD. While the selection is limited at the moment to ESPN 3, ESPN claims Xbox owners will have access to over 3,500 live sporting events each year including NBA, MLB, and college football.

In addition to price and content motivating consumers to flip over to on-demand services, many consumers now have one or more current generation gaming consoles in their homes (a total of 162.1 million Microsoft Xbox360, Nintendo Wii, and Sony Playstation 3 consoles shipped globally as of October 2010). By offering online gaming, Internet browsing (including Facebook and Twitter connectivity), and now instant television programming, the convenience and draw of these consoles as “all-in-one” entertainment machines has caused many consumers to leave the cable box behind forever.

I guess it just comes down to preference.

Certainly, at the moment cable television remains the leader in television programming, but for how long? Will viewers continue to dish out monthly subscription fees that can exceed $40.00 per month for even basic packages that contain 50 or 60 of channels they may not even know they have? Sure, the option to only pay for the content you watch has become convenient and inexpensive, but it’s possible that channel surfers make up a bigger demographic than we know!

By Matthew Scherer, DataBeans.net (matt@databeans.net)

Tags: cable, early november, including news, iPhone, scherer, subscription price, tv

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