Could the end of cable television be nearing? According to a report by Nielsen, “Zero TV” households have increased from three million in 2007 to more than five million in 2013.
That doesn’t mean the people living in those houses aren’t consuming movies and television shows on a regular basis. According to Nielson’s Fourth- Quarter 2012 Cross-Platform report, 67 percent of the Zero TV households enjoy video content through other devices such as computers, Internet, smartphones, and tablets.
Sure, Zero TV describes only about 5 percent of households in the U.S., but signs point to exponential growth of this cable-free population for several reasons.
The first is cost. A leading market research company, The NPD Group, expects the average pay-TV bill to top $123 per month by 2015 and $200 per month by 2020 if TV monthly rates continue to grow.
The second is the growing range of alternative programming sources. Households across the U.S. are still able to watch their favorite Tuesday night TV shows despite having ditched cable. Digital antennas use television signals within range to stream video content, generally in high-definition. The antennas can be purchased from retailers like Best Buy, Amazon, Wal-Mart, and others, with a price ranging between $20 to $100. A Sling box, which is a television streaming device created by Sling Media, is capable of streaming most TV signals over the Internet to any other device. Despite past legal issues where some regarded the box as a means of “stealing” cable, it is a legal device, and the Slingbox MI can be purchased for $150.
Another easy way to access new and archived television shows and movies is by simply subscribing to an online streaming service such as Netflix, Hulu, or Amazon Prime. According to a study by the Leichtman Research Group, Inc., nearly half of all U.S. households have a subscription to a streaming service.
Streaming television shows and movies through an Internet connection is easier than ever. Apple TV, a small box connected directly to an Internet connection and your television, allows you to stream TV shows and movies from iTunes, videos, and photos from personal collections, and of course Netflix, Hulu, ESPN, and other big entertainment names at the cost of $99. Google also has a similar device, called Chromecast, which is a $35 thumb-sized media streaming device that plugs into the HDMI port of a television and casts video content from your computer or mobile devices onto your television using your WiFi connection.
This third reason is poor service. The popularity of online streaming companies and consistently bad customer service ratings from cable customers is to blame for many fed-up consumers cutting the cable cord.
Finally, at-home viewing audiences, especially Millennials, want on-demand programming and they do not want to pay for dozens of cable channels that do not interest them.
“Netflix and Hulu allow me to watch what I want, when I want, and I’m not forced to pay for extra TV shows I have no interest in,” said Sydney Brell, a student at Texas Tech University and a part-time hostess at Fleming’s Prime Steakhouse & Wine Bar. She is on a tight budget and has decided to cut the cable cord.
These days, many at-home viewers say they can hardly keep up with the explosion of high quality programming that has become available in recent years. The viewing time they do have is often devoted to the latest episode of favorite serial programs, such as Game of Thrones, Downton Abbey, Orange is the New Black, House of Cards, Homeland, and Mad Men. The options are many, the prices are modest, and the on-demand option has created a new program watching phenomenon called binge watching. Viewers watch multiple episodes of a program in a single night, often burning through one or more seasons in a matter of weeks or less.
Netflix offers streaming services for about $8 per month, and customers can order DVD’s delivered to their home. Amazon Prime Instant video is $99 per year and includes a monthly book for a Kindle tablet, streaming video access, and shipping benefits. Hulu’s free content includes several network television comedies and dramas while Hulu Plus offers even more streaming access for about $8 per month. Any one or all of these options combined are less expensive than the average cable package – and you get to choose what you watch and when.
Bad customer service and cable companies have become synonymous. Who can forget the audio clip that went viral after a Comcast employee grew argumentative with a customer who requested his service be canceled.
Yahoo Finance, in collaboration with Zogby Analytics, a research survey group, polled 2,500 adults about the customer service at 150 of America’s best-known companies. The participants were asked to rate the service either “excellent,” “good,” “fair,” or “poor.”
Out of the 10 companies with the worst customer service ratings, four were cable or satellite companies: Time Warner Cable, DirecTV, Dish Network, and Comcast.
“Cable is almost no longer relevant these days,” said Jason Mazur, a local carpenter who lives in Alamo Heights and has been cable-free for three years. “They offer no a la carte services, even though they have the technology, and instead continue to bundle multiple-channel packages in an attempt to seem as though they are offering huge content when they are just effectively charging for a large amount of content no one utilizes. They refuse to allow us to only pay for the networks and channels we want and are now merging with Internet providers to effectively control bandwidth and potentially squeeze competition that has sprung up because of their years of over pricing and poor customer service.”
Approximately 20 percent of survey respondents reported their customer service experiences with Time Warner Cable was “poor.” Time Warner’s reported a loss of 800,000 video users between the year 2012 and 2013. DirecTV and Dish Network topped Yahoo Finance’s “Customer Service Hall of Shame” with 20.3 percent and 20.4 percent of respondents respectively rating customer service as “poor.” Comcast was close behind with 24.7 percent.
Not so long ago, streaming video was far from mainstream. Now it is mainstream. What will be the next disruptive technology in the world of at-home program viewing? How much more will it render cable television service, once the dream of every American household, even less relevant than it is today?
*Featured/top image: An Apple TV box. Photo by Max Lewis, licensed under Creative Commons.
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