As the Wall Street Journal reported today (11/22) for the first time since the dawn of Cable TV, the number of U.S. households paying for TV subscriptions is falling. Between the first and third quarter of this year 335,000 subscribers were lost. The debate whether people are “cutting the cord” will continue until a trend is established. Cable TV advertising revenue has been fairly healthy especially when compared to other media sectors.
We are going to see a number of turbulent years as the video model is reinvented. Consumers now have a number of options for consuming video via the internet. From my own experience when our family wants to watch a movie we no longer rely on Cable (we still do subscribe) but access Netflix through my son’s Xbox. Cox is the cable provider for the State of Rhode Island and the lack of movie titles on demand is startling. Although we have a DVR box I just don’t have the time to figure out when a movie may be scheduled on a channel and record it. It is easy to see how cable is losing out to other providers.
There are a number of competing services such as Hulu, Google TV, Netflix and Boxee that allow users to watch movies and TV shows. There has been press surrounding content creators not allowing Google TV to distribute its programming. In the end the content providers control which service will win out. The same thing happened to audio with Apple getting the rights to sell most music titles (and now the Beatles too). Consumers have spoken and they want to access content when and where they want whether is through their TV, computer or mobile device.
We are in the dawn of a new video era, one that has previously been envisioned but is now actually occurring.