As internet connections get more stable and larger bandwidths become more common, streaming services such as Netflix, Hulu, and more recently Disney Plus are becoming the norm. There are tens of millions of subscribers to these services (including households who share subscriptions), and there is still growth despite the fact that one might expect market saturation soon.
Conversely, in the United States people are regularly dropping their cable subscriptions at a rate that is alarming to cable companies. The “cut the cord” movement is strong, and more people are switching away from cable to other sources of entertainment and information, whether that be platforms such as YouTube, the aforementioned streaming services, or something else.
These facts are going to come to a head and force a change in the industry. Here are a few of the key factors:
Advertisements, or the Lack of Them
Commercials are a point of contention for many people, and with the use of ad-blocking apps and services becoming ubiquitous and people having ad-free alternatives to watch the shows and content they would like, it’s becoming clear that there’s a trend against traditional advertising breaks in content. Cable networks have had ads for a long time, and their business model is in-part based on them.
Streaming, in most cases so far, has no ads or far fewer ads (which aren’t as interruptive) in their programming. This is a clear competitive edge in terms of attracting users.
Yet in a way to increase revenue, some cable companies and tv networks are trying to sell more ad space to make up for the lost subscribers. This may be a short-term fix for them, but it’s quite possible they will only drive more customers away with this, exacerbating the problem. Long-term, cable companies are going to have to address this issue.
Cable has traditionally forced subscribers to be in a certain place at a certain time to watch their favorite shows, sporting events, and other content. People would have to adjust their schedules around certain things, and the modern world is less accepting of that concept, and perhaps less accepting of cable as the best way for people to watch what they truly enjoy as a result.
With DVR this has changed somewhat, but there is still an element of inconvenience in having to skip over the commercials mentioned above, as well as remember to record the program in the first place. If someone forgets or there is a technical malfunction, the DVR user can only turn to streaming to get what they missed.
Streaming not only lets people watch what they want, when they want to, they can also simply just pause what they’re watching, and then watch it elsewhere. Cable will need to be able to adapt to more of this model and provide this level of convenience if it wishes to stay competitive.
Access from More Devices
You can’t get cable on your smartphone yet, nor your tablet, your laptop, or a whole host of other devices. You have to have a TV, and while the picture might often be better and it might be people’s preferred device, today busy people often like to have something to watch while waiting for appointments, winding down before bed (if they don’t have a TV in their bedroom), and other situations. It’s another matter of convenience, and a very important one.
Some cable companies are partnering with networks and other content providers to allow one to stream TV on their computer, phone, or other devices if they have an active cable subscription, but this is a half-step away from creating just another streaming platform (which might be where cable heads, at least in part, in the future). How the balance is managed will be a subject worth watching in the coming years.
While there is no reason to believe that the cable industry is going to go entirely under in the coming decades, we do believe cable providers are going to be forced to innovate if they wish to compete with not only with each other but with alternative content providers who are making leaps and bounds in progress each year when it comes to providing customers with a better experience. Your situation will be heavily based on your connection options and your location, but we hope you can use this information to plan for what you might do in the future.