Streaming video killed the cable star
When cable television made its first appearance in the 1950s it revolutionized the entertainment industry. The new technology brought the excitement of in-home movies and shows and hurt Hollywood and the movie industry, that is, until people started seeing how profitable TV could be. In modern times, we are going through a similar transition, as cable TV is slowly being eliminated by the convenience of online streaming video. Now with companies like Netflix and Hulu, people are ditching their cable plans in search of affordable and instant entertainment.
With rapid developments in online media over the past 10 years, the face of entertainment has been slowly shifting to a more personal and viral format. The ability to watch full length, high quality movies and TV shows from the comfort of your home is causing major concern, not only in the movie industry but with cable networks as well. At a much more convenient and affordable price than cable, online streaming video services are becoming more prevalent in households across America. And now that companies like Netflix, Amazon, and Hulu are starting to venture into original and exclusive programming, we might be heading into a world where streaming killed the cable star.
The best part about streaming video services is that you can essentially have subscriptions to every video website for less than the total price of cable. According to the FCC, the average price of basic cable in 2012 was approximately $54.77 per month. With Netflix coming in at $7.99/month, Hulu at $7.99/month, and Amazon’s Prime Instant Video coming in at $79/year for a Prime membership, you would be saving approximately $386.48 a year on entertainment by dropping cable and switching to a streaming only system. Not to mention you would also have access to nearly endless content, which you can watch whenever and wherever you want. With more content moving towards the streaming format, it would be safe to say that it could soon replace cable as the preferred form of entertainment.
And the popularity of these sites continues to grow. Netflix recently released their quarterly earnings statement showing that they had added 2 million subscribers in just the first three months of this year. On top of that, the site reached 4 billion hours of streaming viewing over the past quarter, which essentially puts it in front of most cable networks in terms of hours viewed. In a recent study by Richard Greenfield of BTIG, the average domestic Netflix subscriber is now watching 87 minutes of Netflix per day. This puts Netflix ahead of many major cable networks as one of the most watched services out there.
Much of Netflix’s recent success is in part due to the surprising meteoric rise of their original series “House of Cards,” which debuted in early February. The exclusive original series was hugely popular amongst Netflix subscribers and received high praise from many in the entertainment industry. Netflix also recently launched a brand new horror series “Hemlock Grove,” which has already gained more viewers in its first week than “House of Cards” did in its first week. This momentum in Netflix original series will only get stronger as the return of the hugely popular “Arrested Development” is scheduled to be released in late May. In a short amount of time, Netflix has pretty much set the bar for online streaming services offering exclusive original series, however many others are starting to grab for a piece of the original programming pie.
Hulu has had original programming for several years now, including popular shows like “Misfits,” “Battleground,” and “The Only Way Is Essex,” but the popular streaming service is now adding an aggressive lineup of shows that includes stars like Eva Longoria, Seth Meyers, and James Corden. They are hoping that new shows such as “Mother Up!” (with Longoria), “The Awesomes” (written by Meyers) and “The Wrong Mans” will be able to compete with the success that Netflix has had with “House of Cards” and “Hemlock Grove.”
Joining in on the act, Amazon recently added 14 TV pilots for free viewing to their site. Amazon is allowing their viewers to help vote on which shows they will feature this year as exclusive series on Amazon instant view. This move to start creating original quality programming shows how many of these streaming services are on the same page. Much like Netflix, Amazon sees this new era of streaming TV shows and movies as a huge opportunity to revolutionize Hollywood and the entire entertainment industry.
Even with all of the changes occurring within the spectrum of streaming entertainment, there are still some major challenges facing these streaming platforms from truly competing with cable. The big benefit that cable has now is convenience; all of your entertainment needs are in one place. For streaming, the increase of original content and programming is being spread out across so many different platforms that finding the content you want requires subscriptions to multiple different services. That, coupled with the fact that the video inventory is constantly changing (Netflix just lost partnership deals with MGM, Universal, and Warner Bros. last month), makes finding your video content that much more difficult. And since streaming is becoming increasingly popular, more platforms are beginning to add streaming to their repertoire.
Just recently, YouTube announced that they will be adding ABC, Disney, and ESPN paid channels to their service, in which people will have the ability to pay to watch various short form video content from their favorite service providers directly through YouTube. Though the idea is a great concept, it just adds another service you’ll need to sign up for. Even with the rise in popularity of streaming video aggregate sites like the new Fanhattan -- which compiles links to movies, TV shows and other video content from different platforms like Hulu, Netflix and iTunes -- it is hardly an answer to the overarching problem since you still need to subscribe to each of the different services.
However, with cable subscriptions on the constant decline and some of the worst customer satisfaction ratings in the country, it only feels natural that the transition to streaming is upon us. Will the cable companies change their tunes and embrace streaming or will companies like Netflix and Hulu blaze the trail? That remains to be seen, but what is clear is that we will see a major shift in digital entertainment within the next few years.