There’s good news and bad news for the pay TV industry. The good news is that, according to new research from the Leichtman Research Group, America’s pay TV gained nearly 10,000 customers during the first quarter of 2015. The bad news is that growth represents a 10-year low for the industry. Actually, there’s more bad news, and it’s also more interesting.
During the last year, 370,000 pay TV subscribers decided to cancel their subscriptions. The Leichtman data doesn’t indicate why these customers canceled their subscriptions, but we can reasonably argue that cost and lack of interest were among their reasons. And so were the increasing numbers of online video streaming services. Not everyone who cancels a pay TV subscription signs up for a streaming service, but those who choose to do so have a pair of new options to go along with existing services, such as HBO NOW and Netflix.
It’s Go Time for Showtime
The newest pay TV network to create its own standalone streaming service is Showtime. The service is now live, and free trials are available using Showtime’s streaming app, Roku, or PlaysStation Vue. Using any of these options, Showtime content costs $10.99 per month, which is less than the channel costs through many pay TV providers. However, if you’re already a Hulu subscriber, you can add Showtime for $8.99 per month. So if you haven’t seen them, now’s your chance to binge watch “Penny Dreadful,” “Nurse Jackie,” or “Homeland.”
Nothing that Makes Sense Rhymes With “Lifetime.” Sorry.
In what may not be the most anticipated cord cutting news of all time, Lifetime announced it wants to offer streaming of its older movie library with its Lifetime Movie Club service for $4/month. That $4 won’t even get you that bizarre new one with Kristen Wiig and Will Ferrell; the subscription includes just 30 movies for the time being, some of which you may have accidentally seen at your grandmother’s house, with dramatic titles like “Too Young to Marry” and “The Bride He Bought Online.” If you enjoy movies that explore ways that personal tragedy can lead to growth and empower women to become stronger and more independent, this announcement is great news.
Not Without My DSL
Okay, so Lifetime movies are an easy target, we admit it. But look at the news another way; Lifetime is part of A&E Networks, which also owns A&E, History, the Military Channel, and fyi. So perhaps this is a low-risk test case for A&E. If it fails, people will say “What did you expect?” But if it proves viable, these other channels may soon offer streaming programming as well. So if you want to see war documentaries, get in touch with your feminine side first.
Dreaming of Streaming?
No matter what kind of programming you want to stream online, you won’t be able to stream any of it without a decent high-speed Internet connection. While neither Showtime nor Lifetime list a specific minimum speed, both recommend a minimum of a broadband connection. If your current plan isn’t fast enough to support high-definition video, upgrade to a new service that will give you the viewing experience you crave.
Photo Credit: Shanti Knapp/Flikr
Severing the attachment from cable TV in lieu of streaming and other antenna- and Internet-based entertainment – also known as “cord cutting” – is a surging trend in entertainment consumption. Beginning in 2007 with the dawn of Netflix’s “Watch Instantly” service, innumerable apps and streaming services arrived to provide solace to those who wanted nothing more than to leave their cable subscriptions behind.
Cord Cutters Dice up the Entertainment Market
Cord cutters take this route for various reasons, but the main priority is to stop paying for cable subscriptions, equipment, and other fees that provide loads of channels and programming they never watch.
In the past seven years, as more subscribers abandoned cable, cable companies sought new ways to entice potential cord cutters to stick around. They won some folks over with deals that come with bundling TV and Internet services, as well as connections to mobile devices for watching cable TV on the go.
A Sandvine study reports that subscribers to streaming, alt-cable platforms, such as Netflix, Hulu and iTunes, separate into three categories: cord cutters (top 15th percentile), typical subscribers (15th to 85th percentile) and non-streamers (bottom 15th percentile). The differences in reported Internet usage between cord cutters and typical subscribers especially indicate telling behaviors in a world without (or with less) cable.
Internet Use: Cord Cutters vs. Typical Subscribers
The Sandvine report labeled the group as cord cutters not because researchers were certain that these participants had entirely “cut the cord” with cable, but because their usage profile suggests that they likely based it on the amount of content and hours they stream. The stark differences between cord cutters and typical subscribers prove the heightened attachment to the Internet for entertainment for cord cutters.
For example, cord cutters stream an average of 100 hours per month, a number which may seem high, but between multiple users and devices is not difficult to achieve. Compare 100 hours to only nine hours streamed by the typical subscriber in a month, and the difference is clear. Along with total hours of streaming, cord cutters dominate in mean monthly Internet usage at 212 GB per month versus 29 GB per month for the typical subscriber.
These numbers illustrate cord cutters likely consume a majority of their entertainment via streaming services, while typical subscribers may either not consume as much media or divide their time between both streaming and cable, having only “shaved” the cord (cut back on subscriptions), rather than cutting it completely. They may also indicate that cord cutters are more likely to stream their content from mobile devices, which accounts for the many hours they are able to stream in a month—hours not always spent in front of the TV screen itself.
Cord cutters’ share of streaming and total network traffic is also telling. While cord cutters take up 72 percent of streaming share, the typical subscriber accounts for only 45 percent. And of total network usage (streaming, browsing, online shopping, downloading documents, etc.), cord cutters end up with 53.9 percent of the pie, while the typical subscriber takes up 45.7 percent. Consider these numbers in regards to the non-streamers, who account for 0.5 percent of total traffic per month.
Cord cutters not only dominate streaming data and hours, but once they start streaming, they end up taking up a majority of total Internet usage as well. This points to just how much content people are streaming these days, how long they stream content for and how popular this activity is across the country. The numbers also allude to just how the increase in the number of cord cutters with each passing year.
Cable is still an enormous force in home entertainment, but cord cutting is a trend well on its heels. Whether people are cord cutters or typical streaming video subscribers, it’s hard to ignore the effects this movement has on the home entertainment industry and Internet usage as well.
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