While cable companies were greedily counting their gains and increasing prices year after year, technology leapfrogged the entire industry with a product tailored to users’ needs at a fraction of the cost. Enter Netflix: the streaming service the world had been waiting for.
Cable companies scrambled, frantically adding value (and cost) to their media offerings with internet, phone and even home protection services as they tried to protect their established market shares and revenue.
Meanwhile, online subscription providers like Netflix, Hulu and Amazon took the media landscape by storm. And who wouldn’t want to cut their monthly television fees by half? We’re calling it here and now—Netflix has killed the daytime TV star, and we can all start planning the funeral. Here’s why cable networks suck:
1. Consumers No Longer Want Bundles
Cable networks are frantically looking for ways to hold on to their customers in the face of rising online competitors. With the new à-la-carte competition, super-sized program bundles aren’t cutting it anymore—on average, viewers only watch 17 out of the 197 channels available to them. And companies that bundle TV, internet and phone plans have increased their astronomical fees to $200 a month or more. Inadvertently, cable companies are actually helping their new competition by making the streaming and custom program packages seem more and more enticing by comparison.
2. Too Many New Kids on the Block
Netflix, Hulu, Amazon Prime, Sony PlayStation Vue and Google have already made a dent in the media landscape. Their business model is simple: low-cost, on-demand television available wherever and whenever. You have to give it up for Netflix, who successfully evolved from DVD rentals to streaming and now offers a blend of original programming as well as critically acclaimed in-house produced series like House of Cards and Orange is the New Black. Contrary to cable networks, Netflix and co. thrive on subscription fees alone. Advertisements are limited, monthly fees are manageable—as long as you have an internet connection and a streaming device, you’re good to go! If you’re not convinced, head on over to this cord-cutting cost calculator.
3. Cable Networks are Cornered
The cable industry has been in a consolidation spiral for some time now. Last year, AT&T’s acquisition of Time Warner further perpetuated the trend. This colossal merger can be seen as a reflection of the ways we now consume media—AT&T will be able to distribute content that is formatted and curated for mobile devices. AT&T CEO Randall Stephenson said it best: “The world of distribution and content is converging, and we need to move fast”. But now, the industry has fewer players than ever, so the time of big mergers and acquisitions may also be coming to a brutal end. Either way, with more and more content being geared to our mobile devices, there is less demand for cable programming to fill our leisure hours.
4. Millennials are “Cord-Nevers”
American households are increasingly cutting the cord, but there’s an entire group of individuals who never even subscribed to cable in the first place, aptly dubbed “cord-nevers“. It should come as no surprise that millennials make up a substantial chunk of this demographic. After all, the millennial generation shares an intimate relationship with technology. As online services proliferate, a loyal millennial fanbase follows, leaving cable networks with an ageing group of die-hards and nowhere to turn for new revenue.
Let’s face it: cable companies suck. Their original value—providing viewers with a diversity of channels and premium content—is overshadowed by the beautiful versatility of the cloud. Gone are the days of cable boxes and the TV as a focal point in the living room. Americans can be found streaming on their phones, tablets, computers and smart TVs. Programming models are changing too, as more companies permeate the market like Red Bull, GoPro and Yahoo.
Cable companies won’t completely disappear overnight, but cable as you know it is dying a drawn-out death. Networks will need to revamp their programming models, slash their subscription prices, produce amazing content and make their products ultra-accessible to viewers if they want to stand a chance in the media landscape.
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