Is Television Going the Way of the Dinosaurs?
Consumers endured years of staggering fees, poor customer service, and bundled packages that rivaled a car payment from their cable companies.
If you were to believe all the stories in the media, you’d think that no one was watching TV anymore. It seems like everywhere you look, there’s an article predicting the demise of traditional television programming as people cut the cord. I’ve heard many people say that the only thing worth watching live are sporting events.
Cable TV is a dinosaur
Dinosaurs disappeared because they couldn’t adapt to the changing environment. Consumers endured years of staggering fees, poor customer service, and bundled packages that rivaled a car payment from their cable companies.
Many people cut the cord because they can’t afford the monthly expense. Cable bills have gotten 30% more expensive, on average, in the last five years. The growth is triple the rate of inflation and doesn’t include service fees being added to disguise price hikes. The main reason that people cite for cutting the cord isn’t dissatisfaction with content; it is cost.
With the advent of fast internet connections and on-demand content, live TV delivered through a cable provider is quickly becoming obsolete, and the markets are responding. That doesn’t mean that television programming itself is coming to an end. It’s simply pivoting to meet the new technology and market influences. The flexibility and affordability offered through streaming is a big draw for cord cutters.
Evolution, not extinction
Much like television changed from being a family event after cable introduced hundreds of channels, it is in the midst of another transition. Television isn’t going extinct; it’s just evolving as the market reshapes around content that is deliberately chosen rather than passively accepted.
On-demand content means consumers can watch a deliberately chosen show at a convenient time while streaming allows viewers to watch on just about any device, while on a plane, train, or walking around downtown.
One thing changed that isn’t a new development. In an era of streaming and internet connections, there’s still a demand for OTA antennas to access free local broadcast stations. The fundamental change in the way content is delivered altered the way we watch TV but won’t eliminate the demand for entertainment.
Behavior is changing, but staying the same
Even with significant shifts in consumption behavior, the living room TV isn’t going away. The in-home entertainment industry is still seeing robust growth. People want bigger TVs with better sound systems as the living room becomes a deeply immersive on-demand theater. Movie attendance is at a 25-year low, and companies like Netflix are releasing high-profile movies like Will Smith’s “Bright” direct to streaming. Entire seasons of shows are dropped at once, fueling the increase in binge-watching.
Although Hulu’s UI redesign would have you believe otherwise, AdWeek reports that more than 70% of TV content is viewed on a connected large screen TV in a common room of the household. Handheld devices may be the go-to device for younger audiences, but presuming that TVs will disappear completely is inaccurate. Numbers show that as millennials age, buy homes, and have families, they take on the viewing habits of older generations.
The pace of cord-cutting
Cable is in a slow but inevitable decline. That’s allowing cable and broadcast companies to evolve their business model to over-the-top (OTT) programming. Studies show that OTT is replacing viewers almost as quickly as cord-cutting is trimming them. Viewers are still paying to watch TV; they’re just watching it differently.
The shift to streaming isn’t coming entirely from cord-cutters, but also from cord-nevers, or those who have never had pay TV service. Last year alone had 56.6 million US non-pay viewers when combining the two populations. Predictions are that the two populations will top 80 million by 2021.
Cord Cutters watch more TV than before
Cord cutters actually watch more content than ever. This comes in the form of purchased content like Hulu, Amazon, or Netflix. Multiple device streaming and instant access to your content while away from home are the new face of television.
The growth of skinny bundles is the market shifting to respond to cord-cutting. Over the top programming like Hulu TV, Sling, and YouTube TV are driving growth in paid live TV subscriptions. These paid plans have also responded to the market demand to include local broadcast stations.
Most of the technology upgrades depend upon high-speed internet connections. Only about 10% of Americans currently have enough bandwidth to stream multiple subscriptions, thus limiting the convenience of cord cutting.
OTA broadcasts get a big technology boost in late 2018. Television broadcasts are upgrading to a new format called ATSC 3.0, which will be rolled out by networks on a voluntary basis. The new format commonly referred to as next-gen TV will most likely expand over the course of three years.
Next-gen TV uses a more efficient video format, like the one used by Netflix, to send 4K video via over-the-air. ATSC 3.0 signals will get better reception, even with a modestly priced indoor antenna. It also features picture enhancements and higher-quality immersive audio that improve viewing experiences. The new signal supports movie and TV show metadata, so you’ll be able to view plot summaries, thumbnails, and actor information like you do on streaming services.
Television is here to stay
Cord cutting is big news, but consumers aren’t getting rid of any services, they’re actually watching more paid television like Discovery Channel or TBS on OTT than ever before. Most cord-cutters will tell you that they spend slightly less money but get a higher quality of content than before. Innovations in technology are enabling what consumers really want – better pricing with more choice.
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