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Cable TV is speedily becoming obsolete, while streaming services continue to skyrocket and stronghold the television industry
Allison Slattery hates cable. It's not that she doesn't enjoy catching an episode of Modern Family or watching Legally Blonde on TV— it’s the commercials, the bundled channels, the hefty monthly bills and the fickle DVR she loathes. But with Netflix, all those aggravations are gone.
"I'll watch anything on Netflix over cable," Slattery said. "It's just so easy to grab my laptop and turn on Netflix. Plus I can watch it anywhere versus cable, which is only at home. The TV shows I watch are never on at a convenient time for me to watch them live, so I end up recording things anyways. It's just easier to stream."
Slattery, a junior public relations major, isn't alone—in a small survey, 70 percent of students claimed to have a Netflix subscription, compared to 54 percent who had cable within the same sample. Even Pepperdine University canceled its longtime subscription to Charter cable, making the switch to DirecTV and the online streaming service Philo.
In recent years, cable companies have plateaued in subscriptions, as streaming giants like Netflix continue to amass customers. While cable companies themselves may not be dying out just yet, the cable services they offer may soon be obsolete.
"I do think video streaming will eventually overtake cable TV," Elizabeth Smith, former KTLA live broadcast producer and current Director of Student Journalism, said. "I don’t know what it will look like exactly, but I think the quality of what's streaming now is incredible. I think this overtake will happen sooner than most people think."
Industry Insight
Smith, who holds an Emmy for her producing work, entered the television industry in 2005. Since, she's witnessed firsthand a drastic industry makeover due to rapidly changing technology, audience tastes and demographics. For Smith, there's one main factor that's intensifying streamed TV's race to eclipse cable.
"Programming is changing everything," Smith said.
In simpler terms, it's the shows that audiences are watching. Before 2013, streaming sites relied entirely on deals with major cable companies (which own content-producing cable networks) for content. Netflix's first-ever original series House of Cards shattered that completely dependent arrangement. With more and more original content, sites like Netflix will be exceedingly less reliant on networks the ABCs and CBSs of the industry for programming, Smith said. That means less money spent on acquiring existing shows, and more money spent on making new, high quality content
"They can get bigger names, make fewer episodes and make them more cost-effective to produce," Smith said. "It may not shut down all of the network shows, but it will change the way production is approached. It's changing how people consume media."
Smith isn't kidding about "bigger names" either; in July, the company inked a deal with Chelsea Handler for the first late night talk show exclusively available on a streaming service. On Oct. 2, Netflix announced a deal with Adam Sandler to make four exclusive movies for the company.
Another reason for streamed TV's eventual dominance, according to Smith, is a generational matter. Growing up in a world characterized by the immediacy of technology, younger generations crave a television service where they can watch what they want, for as long as they want, whenever they want.
"Millennials are not going to be satisfied waiting for content on cable; TV show season aren’t going to exist eventually," Smith said, referencing Netflix's model of released-all-at-once series like Orange is the New Black. "Millennials understand how easy technology can make things. Technology has made things more personal; you can watch an entire series in one night if you want. Content is becoming more individualized, just like technology, and that generation is more in tune to that."
Pepperdine's Switch from Cable to Streaming
Pepperdine University canceled its Charter cable subscription in the fall 2013 semester in favor of Philo, a college-centered streaming service, and DirecTV.
Luke Bost, assistant director of housing, cited better services for low prices as the main reason why the university cut ties with cable.
"Charter was not prepared to offer more channels and provide Pepperdine with DVR opportunities. That is one of the main reasons that we switched to Direct TV," Bost explained. "It provides many more channels, DVR access for the main lobby areas, satellite television access for all apartment living rooms and an opportunity for students to order their own personal Direct TV package. Philo was a byproduct of the entire conversation."
Bost also claimed that students' preference for streamed TV swayed the university's decision to cut the cord with cable services.
"We knew at the time that most students were streaming Amazon, Hulu and Netflix instead of watching Charter TV," Bost said.
Unlike Slattery, there are students who still enjoy cable TV. Junior Jazmyne Adeneye is one of them.
"I have cable and HBO, and I use it every single day," Adeneye said. "There are certain shows I have to tune-in for, but most shows I record and watch later because I don’t want to watch commercials. I only have cable at home, and Netflix is usually older shows."
A National Trend
Cable giants like Comcast and Time Warner Cable, who are working to close a $45 billion merger, aren't suffering financially at the hands of streaming-exclusive competitors just yet. Comcast alone reported $5.18 billion in video revenue in the first quarter of 2014 as compared to Netflix, which raked in nearly a fifth of that with $1.27 billion, according to statistics compiled by Varitey.com. While Netflix isn't rolling in the cash that big name cable companies are, consider this: Comcast is 51-years-old; Netflix is less than 20.
At first exclusively a mail-based video rental business, Netflix launched instant video streaming in 2007, according to the company's public relations website. That coupled with the company's streaming partnership with X-Box, Blu-ray and Apple, Netflix subscriptions jumped 26 percent within the year. Eager to expand its already impressive audience, Netflix sought new markets. In 2010, they found it: the Netflix Apple Store app. With streaming available for iPhones and iPads, Netflix experienced a whopping 63 percent boost in subscriptions, finishing the year with nearly 20 million subscribers.
Today, Netflix is a titan in the television business. It boasts more than 50 million customers worldwide, claiming more than 35 million subscribers in the U.S. alone, according to Netflix. Combined, Comcast and Time Warner Cable have 33 million domestic customers, according to Pew Research.
Witnessing firsthand the lightening-speed success Netflix is enjoying, cable companies are following suit. ABC, CBS, AT&T and many other networks now have apps for customers to watch select video content on their mobile devices and laptops. Even Comcast is now offering the streaming services Streampix and Xfinity in addition to cable subscriptions.
These new features may just be the beginning of a long process of swapping cable services for streaming. But if customers like Slattery are any indication, cable companies may be eliminating cable altogether sooner rather than later.
"Why would I bother with cable? Netflix is just too easy," Slattery said.
Allison Slattery hates cable. It's not that she doesn't enjoy catching an episode of Modern Family or watching Legally Blonde on TV— it’s the commercials, the bundled channels, the hefty monthly bills and the fickle DVR she loathes. But with Netflix, all those aggravations are gone.
"I'll watch anything on Netflix over cable," Slattery said. "It's just so easy to grab my laptop and turn on Netflix. Plus I can watch it anywhere versus cable, which is only at home. The TV shows I watch are never on at a convenient time for me to watch them live, so I end up recording things anyways. It's just easier to stream."
Slattery, a junior public relations major, isn't alone—in a small survey, 70 percent of students claimed to have a Netflix subscription, compared to 54 percent who had cable within the same sample. Even Pepperdine University canceled its longtime subscription to Charter cable, making the switch to DirecTV and the online streaming service Philo.
In recent years, cable companies have plateaued in subscriptions, as streaming giants like Netflix continue to amass customers. While cable companies themselves may not be dying out just yet, the cable services they offer may soon be obsolete.
"I do think video streaming will eventually overtake cable TV," Elizabeth Smith, former KTLA live broadcast producer and current Director of Student Journalism, said. "I don’t know what it will look like exactly, but I think the quality of what's streaming now is incredible. I think this overtake will happen sooner than most people think."
Industry Insight
Smith, who holds an Emmy for her producing work, entered the television industry in 2005. Since, she's witnessed firsthand a drastic industry makeover due to rapidly changing technology, audience tastes and demographics. For Smith, there's one main factor that's intensifying streamed TV's race to eclipse cable.
"Programming is changing everything," Smith said.
In simpler terms, it's the shows that audiences are watching. Before 2013, streaming sites relied entirely on deals with major cable companies (which own content-producing cable networks) for content. Netflix's first-ever original series House of Cards shattered that completely dependent arrangement. With more and more original content, sites like Netflix will be exceedingly less reliant on networks the ABCs and CBSs of the industry for programming, Smith said. That means less money spent on acquiring existing shows, and more money spent on making new, high quality content
"They can get bigger names, make fewer episodes and make them more cost-effective to produce," Smith said. "It may not shut down all of the network shows, but it will change the way production is approached. It's changing how people consume media."
Smith isn't kidding about "bigger names" either; in July, the company inked a deal with Chelsea Handler for the first late night talk show exclusively available on a streaming service. On Oct. 2, Netflix announced a deal with Adam Sandler to make four exclusive movies for the company.
Another reason for streamed TV's eventual dominance, according to Smith, is a generational matter. Growing up in a world characterized by the immediacy of technology, younger generations crave a television service where they can watch what they want, for as long as they want, whenever they want.
"Millennials are not going to be satisfied waiting for content on cable; TV show season aren’t going to exist eventually," Smith said, referencing Netflix's model of released-all-at-once series like Orange is the New Black. "Millennials understand how easy technology can make things. Technology has made things more personal; you can watch an entire series in one night if you want. Content is becoming more individualized, just like technology, and that generation is more in tune to that."
Pepperdine's Switch from Cable to Streaming
Pepperdine University canceled its Charter cable subscription in the fall 2013 semester in favor of Philo, a college-centered streaming service, and DirecTV.
Luke Bost, assistant director of housing, cited better services for low prices as the main reason why the university cut ties with cable.
"Charter was not prepared to offer more channels and provide Pepperdine with DVR opportunities. That is one of the main reasons that we switched to Direct TV," Bost explained. "It provides many more channels, DVR access for the main lobby areas, satellite television access for all apartment living rooms and an opportunity for students to order their own personal Direct TV package. Philo was a byproduct of the entire conversation."
Bost also claimed that students' preference for streamed TV swayed the university's decision to cut the cord with cable services.
"We knew at the time that most students were streaming Amazon, Hulu and Netflix instead of watching Charter TV," Bost said.
Unlike Slattery, there are students who still enjoy cable TV. Junior Jazmyne Adeneye is one of them.
"I have cable and HBO, and I use it every single day," Adeneye said. "There are certain shows I have to tune-in for, but most shows I record and watch later because I don’t want to watch commercials. I only have cable at home, and Netflix is usually older shows."
A National Trend
Cable giants like Comcast and Time Warner Cable, who are working to close a $45 billion merger, aren't suffering financially at the hands of streaming-exclusive competitors just yet. Comcast alone reported $5.18 billion in video revenue in the first quarter of 2014 as compared to Netflix, which raked in nearly a fifth of that with $1.27 billion, according to statistics compiled by Varitey.com. While Netflix isn't rolling in the cash that big name cable companies are, consider this: Comcast is 51-years-old; Netflix is less than 20.
At first exclusively a mail-based video rental business, Netflix launched instant video streaming in 2007, according to the company's public relations website. That coupled with the company's streaming partnership with X-Box, Blu-ray and Apple, Netflix subscriptions jumped 26 percent within the year. Eager to expand its already impressive audience, Netflix sought new markets. In 2010, they found it: the Netflix Apple Store app. With streaming available for iPhones and iPads, Netflix experienced a whopping 63 percent boost in subscriptions, finishing the year with nearly 20 million subscribers.
Today, Netflix is a titan in the television business. It boasts more than 50 million customers worldwide, claiming more than 35 million subscribers in the U.S. alone, according to Netflix. Combined, Comcast and Time Warner Cable have 33 million domestic customers, according to Pew Research.
Witnessing firsthand the lightening-speed success Netflix is enjoying, cable companies are following suit. ABC, CBS, AT&T and many other networks now have apps for customers to watch select video content on their mobile devices and laptops. Even Comcast is now offering the streaming services Streampix and Xfinity in addition to cable subscriptions.
These new features may just be the beginning of a long process of swapping cable services for streaming. But if customers like Slattery are any indication, cable companies may be eliminating cable altogether sooner rather than later.
"Why would I bother with cable? Netflix is just too easy," Slattery said.