In the past few years, online video has exploded. The Internet has become faster and more accessible, online video advertising has become more personalized, and perhaps most importantly, mobile video streaming has become the viewing platform of choice for anyone under 21. By 2017, a Cisco study predicts that video-on-demand traffic will nearly triple and be equivalent to six billion DVDs per month. (That’s a lot of Breaking Bad episode streams.)
Two years ago, I wrote a Misinformation column about how I cut the cord from cable TV and started watching television shows and movies via streaming video to my HDTV. I survived two long years by using a number of apps like Netflix, Hulu, HBO GO and Amazon Prime on both a Roku box and Apple TV.
When I cut the cord, Netflix had just announced they would be acquiring and producing first-run original content, which at the time was a risky move for the recently troubled online movie provider. Instead of licensing expensive content only, the move to produce their own content has proven to be a huge success, with House of Cards recently nominated for three Emmys® and Orange is the New Black being both a critical and commercial success. Because of Netflix, "binge viewing" has become a new catchphrase, describing watching a television series in its entirety over a short period of time.
Up until now, cord-cutting was a small phenomenon and generally was relegated to individuals who didn’t watch a lot of TV, and although we’re still in the early stages, it’s starting to become a concern for cable and satellite providers. In a study by Frank N. Magid Associates, in the past year, 2.7% of pay TV subscribers said they would be very likely to cancel their service in the next 12 months, up from 1.9%—a 42% increase. If we see 42% increases year after year for the next decade, this would be a catastrophe for the industry.
Perhaps the only solution to slow the trend of cord-cutting is for the cable companies to offer à la carte programing. Recently, legislation has been introduced by Senator John McCain to encourage an à la carte pricing model, but it’s still only a proposal. And playing devil’s advocate, there would be repercussions. With the majority of subscribers choosing to pay for five or 10 channels instead of hundreds, this most likely would eliminate smaller or niche channels and some of your favorite programming.
But even after saving more than $2,000 over two years, I still happily returned to subscription TV a few months ago. Why? Live-sports programming. Here, in Los Angeles, it’s now impossible to receive any regular season home team NBA coverage without a cable or satellite TV provider. Time Warner Cable paid $3 billion for TV rights for the Lakers and $8 billion for the Dodgers over the next 25 years, and swiftly passed on these costs to its Southern California subscriber base. Sports gives subscription television leverage due to fandom. ESPN alone costs each subscriber approximately $70 per year, which enrages viewers who don’t watch sports. The sports network has become one of the most valuable media properties in the world.
Perhaps the biggest upcoming factor in cord-cutting is YouTube, which has more than 1 billion unique visitors per month and reaches more U.S. adults ages 18-34 than any other cable network. Recently, Google met with the NFL to discuss bidding on NFL’s Sunday Ticket, a package of NFL games that DirecTV currently pays the NFL $1 billion per year for. This would be a huge game-changer for online video, but can you picture your average Joe and his buddies sitting around computer screens watching games while consuming beer and buffalo wings?
Either way, I think it’s safe to say that Internet TV will replace linear TV sooner rather than later.
Misinformation” is a joint effort between HDVideoPro and the Sachtler Academy. The Sachtler Academy is dedicated to promoting open knowledge exchange among production professionals worldwide. Initiated by renowned camera support manufacturer Sachtler, the Academy offers a nonpartisan venue by which cinematographers and videographers can hone their talents, discuss techniques and stay updated on technical advances from various manufacturers. To find out more, visit www.sachtler-academy.com/ and www.sachtler.us.