The Latest in Cord Cutting
“Why do I have to pay for all the channels when I only use a few”
Consumers have been asking their cable companies this question for years. In an expanded cable universe the percentage of channels used by the average consumers has declined from when there were 40-50 analog channels just a few years ago. Truth of the matter is that viewers wanted choice and more was better in their eyes. But with the average bill exceeding $100 monthly consumers are asking, “Is there a cheaper way”. Now there is, if you are willing to trade off programming. And in fact there are more than just cord cutters, there’s a new breed of “cord never wasses”.
An earlier Struming, Real Alternatives for Less Expensive TV, addressed this issue and my friends at MayoSeitz Media, a terrific media agency in Pennsylvania addressed this very issue last week in their MayoSeitz Media Monitor called New Reasons to Cut the Cord. Smart stuff. The following is their post in its entirety.
Just this past week Showtime, following in the footsteps of its rival HBO, announced that they will be launching their own standalone streaming service for around $11 per month. The service, which does not require a traditional television subscription, will include unlimited on-demand access to Showtime original series as well as movies, documentaries and sports programming. Unlike HBO, which debuted exclusively on Apple TV, Showtime is off to a good start by joining up with Roku and Sony along with Apple TV rather than going with just one partner.
Currently Roku commands around 29% of the streaming device market, the new Chromecast lands at 20%, Apple TV at 17% and Sony at a little below 10%. Showtime will now have access to nearly three times the number of potential customers compared to HBO, and will keep this advantage as both HBO and Showtime roll out to Android devices and the increasingly popular Google Chromecast.
HBO Now, priced at around $15 per month- double the cost of Netflix, timed its April launch in connection with the first few episodes of Game of Thrones in an attempt to gain subscribers that would only watch the network for that show. While it hit #1 in the App Store in its first week it has remained in the top 20 for entertainment apps since then. Currently, HBO Now is already considering lowering their pricing structure to a one-time only fee versus a monthly charge.
Despite not having the blockbuster shows HBO has, and the distinction of playing second-fiddle to the network in terms of pay subscribers, Showtime’s advantage with a lower initial price and wider rollout could be a good deal for cord-cutters and, along with their parent company’s other streaming service CBS All Access at $6 per month, they can continue to boost revenues with two distinct markets of cord-cutters.
When CBS announced last year that it would offer a streaming-only service that would include all of its current programs, it was seen as one of the first signs of the diminishing importance of cable TV. With this move, CBS became the first and only basic cable network to offer its shows without being part of a cable package. Now with the inclusion of Showtime this summer the network’s two main brands have gone off the grid at a combined price just above HBO Now. While Showtime doesn’t have as big of a smash hit as Game of Thrones it still has numerous critically acclaimed programs like Ray Donovan that can win over customers while CBS can count on highly successful shows like The Big Bang Theory, The Good Wife, and Madam Secretary.
One potential hiccup of these moves is the limited size of the market across the board. Currently, only 10% of US broadband households have a mobile streaming device according to data from the end of 1Q 2014, but with over 50% of video content coming on non-linear mediums, the market for streaming content can only improve with time. In fact, one estimate shows that over 50 million streaming services will be sold globally by 2017. Thus, networks and companies looking to go off the grid will find it in their best interests to gain as many partners as possible right out of the gate.
Nearly all the major cable networks now have a streaming option, including ESPN, AMC, TNT, TBS, and Disney. If you’re a selective viewer, picking and choosing streaming options can save you money but streaming services don’t yet have local broadcast channels and Apple’s plans to begin streaming local channels this year have reportedly been delayed. Viewers still need broadcast TV or cable if they want to watch their local TV news or the latest episodes of broadcast shows such as “Empire” on the night they air. Additionally, a streaming setup is generally more complicated than cable TV service not to mention the need to purchase a streaming device. Finally, cutting the cord would eliminate the ability to record multiple shows at one time and of course channel surf, a term that one day soon might become old hat.
Nothing stays the same for long. Gotta love technology.