The future of media distribution is certainly at a crossroads right now. We are seeing a tumultuous period in traditional forms of media, and television is no exception. More and more American’s are opting out of expensive pay-tv subscriptions in exchange for digital antennas and subscriptions to streaming services such as Netflix and Hulu Plus.
Trends in media consumption have changed radically even within the year, with digital viewing increasing at an impressive rate. According to a recent Nielsen report growth for digital viewing rose 53% for individuals ages 18 to 43 over the past year. In fact, this high growth of digital viewing is even more pronounced for older demographics with an 85.7% rise in 35 to 49 year olds and a 72.7% rise in 50 to 60 year olds. TV, on the other hand, saw a 4.2% average drop in adult screen during the past year.
These discernible growth rates in digital viewing should serve as a wakeup call for pay-tv providers. No doubt they have felt the stinging winds of change; digitaltrends.com revealed that 2013 marked the first year in the history of television which pay TV providers lost more subscribers than they gained. Not only that, but there are now over 10 million households in the U.S. with internet services but no traditional cable or satellite connection. And over half are subscribed to some sort of monthly streaming service.
There are many additional choices to be made once deciding to cut the cord on cable, most importantly how to create your own bundle of content. Many sports fans may have the most difficult time taking off the noose of pay-tv, but that too may be changing soon. Recent deals made between the NBA and ESPN have made internet streaming of live basketball games possible for anyone willing to pay for the subscription cost with no cable or satellite needed. The new streaming service will host 100 live games, 750 hours of additional new content, and archival footage. ESPN has also expressed interests in doing the same for additional sports.
If deals can eventually be made and sports move to pay streaming services, it could ultimately mean the end of the pay-tv we know today. But there is a way to save the industry, and that involves following the lead of our neighbors to the north.
According to Nielsen, the average American only watch 17 different channels, yet some plans include hundreds upon hundreds of channels. Verizon has been showing an increasing interest in developing a pay-per-channel (or “a la catre”) system of allowing consumers to buy their television. This practice of “a la carte” television has been successfully practiced in Canada with television service Telus’ Optik. Subscribers pay a low rate of $26 a month for 40 US and Canadian channels while having the option to buy channels specially bundled “themed packs” for an additional $8.00 a month, or buy any channel individually for $3.50 a month.
While the vision of a la carte television may be only a pipe dream for U.S. consumers, many are creating their own version of this system by cord-cutting. As more and more channels offer streaming subscription services we are moving closer and closer to a world without traditional television. How can these television networks (primarily local network affiliates) expect to survive if something is not done to our current industry model? Is there any hope to save traditional television, or are we simply seeing a redefinition of what it means to be “watching television” in an evolving industry?
Cutting the cord may not be the best answer to the current state of, but changes to television distribution must happen and quickly and right now cord cutting seems to be the most viable option for change. New technologies should continue to supplement traditional media, not supplant it.
– Aaron Sprengeler