Cord cutting continues to capture customers from cable companies and satellite pay-TV providers.
A series of recent reports highlight one of the most significant trends in the world of AV: Cutting the cord to cable and satellite TV services and instead relying on Internet streaming, downloads, OTA broadcast TV, and physical media for news, sports, and entertainment.
While OTA (over the air) broadcast TV and physical media are part of the cord-cutter equation, another trend is perfectly clear: From Wall Street analysts to the CEO of Comcast, the future of home entertainment is streaming. Of course, given that Netflix already earned its own button on countless remote controls, it’s obvious that in many ways, the future is already here.
Things are looking grim for pay TV providers. The first quarter of 2017 saw cable and satellite operators lose over 700,000 subscribers and among major cable companies, and only Comcast managed to grow its customer base through aggressive marketing. In May 2016 the Boston Globe called cord cutters “rare beasts” and a “thin trickle.” But, that was then and this is now.
Comcast CEO Brian Roberts recently appeared on Bloomberg TV and bluntly acknowledged the challenges facing the cable industry by stating it is “Happening. We have seen it coming.” And according to a research note by one Wall Street television analyst—John Hodulik from UBS—things are about to get tougher for the cable industry, with the potential for a million cord-cuttings in the second quarter of 2017. And with National Cut The Cord Day falling on Friday July 7, the third quarter of 2017 is looking equally tough for pay-TV providers.
A key development driving cord cutting is the evolution of smart features in televisions, game consoles, Blu-ray players,, as well as stand-alone players like Roku, Apple TV, and Amazon Fire TV.
Importantly, many manufacturers have markedly improved the smart TV platforms that run their modern flat-panel displays. If a TV buyer already has broadband internet, they will find that their new TV already offers a plethora of entertainment options built-in.
Another issue with cable TV is cost. Simply put, the monthly packages continue to get more expensive. Customers are forced to buy “bundles” of channels to gain access to the shows they want. Add to that the extraordinarily poor reputation that cable company customer service has earned, and the rigidity of cable company contracts, and it’s clear that consumers would eventually flock to a superior alternative.
You can’t talk about cord-cutting without discussing the Netflix Effect. How big of an impact has the king of subscription-based streaming had? Consider that Netflix consumes roughly 1/3 of North American Internet bandwidth.
And then there’s the issue quality. Do you want to watch 1080p content on cable TV? Sorry, you are out of luck! How about streaming on-demand movies and shows in UHD with HDR? Definitely not, best to check out Vudu, Netflix, and Amazon instead!
A reasonable deduction is that without live sports, the cable TV industry would already be in a much steeper decline because when it comes to news, movies, and TV shows, the Internet already provides a cornucopia of alternatives. But if you are into football or baseball or basketball or hockey, you’ve got few choices aside from handing cash to a pay-TV operator. There are some options for cord-cutting sports fans, like buying an antenna, or subscribing to a service like Sony PlayStation Vue, or Sling TV. None are as complete as what pay-TV offers, but they can satisfy the needs of a casual sports fan.
In many instances, the same company that provides cable service also provides Internet, so the future is not explicitly bleak for cable companies like Comcast. But, it’s clear that a tectonic shift is occurring and the cord-cutting trend is only accelerating.
So, are you planning to cut the cord on July 7, or at some point in the future? Have you already severed your connection to pay-TV? Take the poll by following the comments link or by clicking here.
Are you planning to cut the cord on July 7 2017?
1. I have already cut the cord.
2. It’s the perfect day to cut the cord!
3. Too soon for me, but I plan on doing it eventually.
4. I like pay-TV service and plan to keep it.
5. I’m a cord-never!