The Death of Pay TV

I’ve never paid for cable television. Neither have any of my close friends. I’ve never paid for a newspaper subscription either. Since young adulthood I’ve always gotten my news on the internet. My friends and I all much preferred playing video games, or watching DVDs of imported movies and TV shows to watching cable TV. After Youtube came around in 2005, and with the appearance of Netflix, I never saw the need for cable TV. I only watch cable on occasion for live sports, but in general, I can’t watch a movie on cable TV, because the experience is totally ruined by ad breaks every 12 to 15 minutes. The movie is censored, edited, cut down, and worst of all interrupted by commercials. Watching TV shows is equally annoying. I would much prefer to simply wait for a show to come out on Netflix and then binge watch it at my leisure. I could also watch on Hulu, which while it shows ads, shows fewer ads than TV and at least gives you the option of watching the show when you want. Using a DVR to record a cable TV show and then fast-forwarding with the remote through every ad break is an annoying and wasteful “solution” to commercials.

On-demand video for a reasonable subscription fee is clearly superior, which is why every fiscal quarter cable TV subscriptions in the United States are dropping by several percentage points. A cable subscription with any large amount of channels usually costs at least $80 a month, with better packages costing more.  The real driver of on demand video, in my opinion, isn’t simply cost. If I pay for an internet connection, subscribe to Hulu, Netflix, and Amazon Prime, I may end up spending $65 a month or more on an internet connection and the various subscriptions. The real appeal is choice. I can watch a show when I want, on any device, wherever I want, and I have to deal with little or no advertising. There’s zero commercials on Netflix, there’s zero commercials on Amazon prime. There’s zero commercials for a pay subscription of Crunchy Roll, an anime service that I pay for.

I can choose the streaming services that have the  offerings I want, instead of being forced to pay a cable bundle which gives me 200 channels that I’m simply not interested in and will never watch. I can subscribe to as many or as few of them I want. I also have access to a whole world of online video with an internet connection. Video that is new, and more innovative than the old TV models. I can watch people play video games streaming live on Twitch. I can watch literally any type of video you can think of on Youtube and to a lesser extent on Vimeo and other providers. Even Yahoo! is producing television shows now. All of those sites are free to watch videos. All I have to do is have an internet connected device and I’m good to go.

The writing is on the wall. As the younger, connected generation grows up, more and more of them have no use for cable TV. In a big signal the industry is dying, one of cable’s most valuable companies, HBO, is now offering their own on-demand streaming service, which means they are now directly competing with the cable monopolies that provide their shows to millions. Over 35 million people a week are pirating their hit show Game of Thrones the day it comes out. If they can capture even 1 million of those viewers with a $15 a month subscription fee, that’s $15 million a month added to their bottom line, without really having to do anything. Better to make money directly off the customer than have it come through a cable provider middle man, after all.

Now if only we could get more competition in the internet service provider space. More on that later.

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