The Number of People Giving Up TV for the Web Is Slowly Gaining Pace

from the cord-cutting dept

A new report estimates that some 800,000 American households now watch TV only via the Web, as the move to abandon cable, satellite or OTA broadcasts starts to gather pace. This represents a small percentage of the pay TV industry's 101 million subscribers, but the number is expected to double by the end of next year. These are the earliest adopters, though, and they account for just 3 percent of all full-episode online television viewing -- meaning that plenty of people are already supplanting their standard TV viewing with online episodes. It's clear already (and has been for some time) that TV viewers are undertaking a fundamental change in how they want to access and view content. The combination of the Web and DVRs allowing on-demand viewing has made the linear TV channel something of an outdated concept, and at some point, TV providers will need to realize that on-demand shows are now how a growing number of people want to receive their programming.

Cable companies, for one, recognize this to a certain extent, so they've responded with TV Everywhere, a plan to offer programming online. But that plan is doomed to failure because it's being implemented in the hamfisted way you might expect from cable companies, and is set up simply to force people to keep paying for cable if they want to watch shows online. If the plan to capitalize on online viewers is first to force them to keep paying for something they don't want, then by further embracing the "features" of current systems that drive users away, it's hard to see TV companies having a whole lot of success. The key is not to shoehorn the cable model onto the web, but to embrace the positive features enabled by the web and apply them to the rest of their business.


Reader Comments (rss)

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    Rose M. Welch (profile), Apr 13th, 2010 @ 9:04pm

    My husband and I have recently been watching Spartacus, which is being moved to Netflix streaming show by show, as opposed to season by season. It rocks! (The streaming, not the show. The show is mediocre.)

     

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    technofreak, Apr 13th, 2010 @ 10:31pm

    Australia

    Down here TV is in a shocking state! We gained all these extra Free-to-Air Digital stations full of crap. And even then they rarely complete a season once they start.
    Then there is the monopoly of Pay-TV that will charge you too much for a heap of crap nobody wants to watch and maybe eventually show some shows 6months after they are released.

    We don't have the web-TV stuff like you do in the US yet...so we have to rely on Torrents...and they wonder why we are pirates!? It's bloody crazy!!

     

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      Michael (profile), Apr 13th, 2010 @ 11:05pm

      Re: Australia

      Copyright Infringement: a clear sign that potential consumes aren't being offered a service at a tolerable value.

       

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        DCX2, Apr 14th, 2010 @ 5:42am

        Re: Re: Australia

        Thanks. That is one of the concise definitions of copyright infringement that I have ever read (even if "clear" may be a bit hyperbolic)

        Though you also have to consider some people whose value is "free", and still others whose value is less than reasonable, and that it is in interest of the industry to overstate the number of cheapskates.

         

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    Billy the Mountain, Apr 13th, 2010 @ 10:54pm

    Remember Frank Zappa's " The Slime " pretty much says it all very little of any worthwhile content just mindless network pablum spooned out to the valium entranced masses.

     

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    Jupiter (profile), Apr 13th, 2010 @ 11:21pm

    You'll know TV is dead when Netflix offers free ad-supported streaming (no ads for subscribers). Pick what you want to watch when you want to watch. That's the American way!

     

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    Aussie, Apr 14th, 2010 @ 12:00am

    I watch most my Tv on the web it does rock, never miss a show, go at my own pace, though at only 40 gig a month download I have to be careful.

    Australian internet deals suck, and while the stupid government does not fix the networks, online business in Australia will suffer, and cracking a game that relies on internet to lan play will be the desirable option.

    Fixing our net will promote a huge boost in online business and technologies, come on Australia do we want to be stuck in the 90's while the rest of the world laughs at us and zooms ahead?

     

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    Anonymous Coward, Apr 14th, 2010 @ 12:37am

    i expect it to go the way of the landline, for many people atleast

     

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      Chargone (profile), Apr 14th, 2010 @ 4:34am

      Re:

      i see statements like that and remember just how odd the situation in New Zealand is... more and more people have mobiles, but the old landlines just aren't going away. often getting upgraded and bundled with web services (and sometimes cable tv) but certainly not going away.

      that said, for a fair number of people here a tv is simply a convenient VDU for consoles, DVD players,and, depending on the make, computers. though far more people still use it to watch free to air tv :D

       

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    Social Media Soup (profile), Apr 14th, 2010 @ 12:55am

    I've gotta say I've been using web based tv for about 5 months now. Watch most of my favorite shows on Hulu, and I got say I'm loving the convenience and the price. Can't go wrong with free, or the ability to watch it when I want to, instead of when the networks schedule it. I don't have to worry about dvr'ing it, or missing a show.

    Most cases there's even less commercials online so I can watch all my favorite shows but be more productive cause I spend less time doing it. This is more time I can devote to my consulting business.

    I see cable as we know it dieing, and being completely replaced in the next 5 years. Everyone will hopefully be connected to at least a fiber connection. Though I'm doing ok with DSL, I miss the Fiber I had when I lived in Utah. Fiber rocks, but that's another comment on another blog post lol.

     

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      Hephaestus (profile), Apr 14th, 2010 @ 6:24am

      Re:

      "I've gotta say I've been using web based tv for about 5 months now."

      I have been doing something similar. I still havent broken the cable habit. About a year ago I setup a Linux box and pull everything I want to watch as it become available on hulu, and the individual stations sites. It took a little work and programming to figure out how to grab the video from some of the sites automatically. That PC-box is a web TV DVR with 4 Tbytes of storage space. This is where things are slowly moving, either on demand or DVR'd.

       

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    Planespotter (profile), Apr 14th, 2010 @ 1:39am

    The "TV Channel" is almost dead, you can hear it taking its last lingering breaths, I can watch any BBC channel, some ITV and Channel 4 online via a webpage or in the case of BBC iPlayer streamed to my Humax FreeSat settop box. All I want now is the ability to add content to my own "Channel" so I can set up the whole evenings viewing before I get home.

    The sooner these companies transition into simple content providers and give us the ability to choose how we watch their content the better in my opinion.

    As the Aussies point out, they are pirates because there is no services available, they are forced to wait months, like the UK and Europe, for shows airing in the US, the sooner we have global releases and someone produces a service at a decent price the sooner those numbers of "pirated" shows will drop.

     

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      Someone, May 20th, 2010 @ 4:27pm

      Re:

      There are a lot of global brands out there , and streaming different commercials per country of destination is very doable as well.

       

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    ElijahBlue (profile), Apr 14th, 2010 @ 2:13am

    Going web-only wasn't by choice in my house. I got rid of the cable TV subscription about two years ago to save money. We never had an available over-the-air signal before the switch to digital.

    After the change to digital, we get exactly two English-language TV channels with the digital coverter box and a huge and greatly embarrassing set of rabbit ears in the window.

    I'd rather stream movies on Netflix over the internet - nothing says failure with a capital F quicker than a 40-something renter with a rabbit ears antenna taped to the glass in the living room window. (This was the only way we could get any signal at all.)

     

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      Anonymous Coward, Apr 14th, 2010 @ 3:51am

      Re:

      Rabbit ears don't say failure to me. Failure is $50+ a month for few extra channels with little added content.

       

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        Chargone (profile), Apr 14th, 2010 @ 4:37am

        Re: Re:

        heh, here, rabbit ears just say 'i don't own the building and thus cannot install a larger antenna with better reception on the roof'

         

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    Paul-G, Apr 14th, 2010 @ 2:28am

    Who will create?

    I also am a Web only viewer of a short list of torrented shows I select. I rarely watch terrestrial TV as I HATE being tied to their schedule and adverts.

    While I much prefer the freedom this gives me, I do think that I am one of the people who is killing the industry. So that raises a big question;

    Where will the content come from in the future?

    Producing content is expensive. Without the advertising revenue where will the money come from to continue producing new content? What will be available once we have destroyed the current businesses that produce.

    While the demise of newspaper producers is replaced by quite good quality blogs I do not believe that TV will be replaced in a similar way. There is a smattering of GREAT indie productions in shows and films (The hunt for Golum is a great example) but nowhere near enough to replace the hours of content commercially produced daily.

    Enjoy it while it is there but the future does not look so bright.

     

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      ElijahBlue (profile), Apr 14th, 2010 @ 3:36am

      Re: Who will create?

      I forgot to note the positives of not having cable TV or an over-the-air signal. The things I like to watch are available for free or inexpensively online. Such as, I'm a huge fan of true-crime documentaries and PBS documentary show Frontline. My husband is addicted to 48 hours, and he watches these shows for free on the CBS website.

      I can buy individual episodes for $2.99 or less from Itunes, watch the Frontline episodes for free on the PBS website, or I can buy or rent the DVD and rip it to my IPOD. Of all these choices, my least favorite is streaming the video live from a website because of the time factor - I don't really have time to park my butt in front of the computer monitor. So far I haven't downloaded anything from bittorrent, because I've been able to find everything I want to watch at a reasonable price.

      There's more than enough down time for me. I'm often waiting in remote places where there's no internet connection - because of family circumstances, I spend more time than I'd like in doctors' office waiting rooms. The people around me are usually stressing out, staring at their watches, giving the receptionist dirty looks, while I'm totally involved in a documentary about Mexican street gangs that I've ripped to my video IPOD.

       

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    wheels4me2 (profile), Apr 14th, 2010 @ 4:02am

    die! die! die!

    I have been off the cable grid for 11 months living on Netflix, torrents and Hulu. I saw my first commercial in 10 months last week. It was a surprise to realize how long it had been since my last commercial and how good it was to not have to watch them.

    My cable provider is "Ygnition" which is essentially a re-biller for Direct-TV targeted for apt complexes. Ygnition is 2x the price of Direct-TV. Direct-TV is clearly in collusion with Ygnition since they will not provide service at an Ygnition served complex.

    It is great to be able to watch an entire series back-to-back. The last few days it was the PBS/Ken Burns saga of WWII - WAR. No commericals, no pledge drives and watching it whenever I want--such as now at 4 AM.

     

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    Bob V (profile), Apr 14th, 2010 @ 4:27am

    My fears

    Listening to podcast and reading various tech news sites has slowly been percolating a thought.

    I love the concept of watching tv over the web. My cable/internet/phone bill is 170 a month. I would love to cut that down to around 120 a month without losing any choices.

    My problem is that so many content companies want to monetize the shows directly like the itunes store, the zune marketplace or other similar ideas when I watch 1 show for x amount of dollars. This is great they get paid i get to watch a show in a manner I find convenient. The problem is lets say there are approximately 8 prime time shows i watch through the week. at $2 per show that would be approximately 64 a month just for the prime time shows.

    This is over the amount i want to save by ditching cable TV. Also no i don't have any spare cash to discover new shows.

    I'm all for discovering new ways to make money off of a product. My problem is that it seems every content producer feels like they exist in a vacuum. They can charge what they feel is reasonable which on the face of it usually is but there is only x amount of dollars in the budget. Something has to give and then I have to listen how they can't make any money. They can't make money because I don't have money to spend on their experimentation

     

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      Rekrul, Apr 14th, 2010 @ 3:13pm

      Re: My fears

      My problem is that so many content companies want to monetize the shows directly like the itunes store, the zune marketplace or other similar ideas when I watch 1 show for x amount of dollars. This is great they get paid i get to watch a show in a manner I find convenient. The problem is lets say there are approximately 8 prime time shows i watch through the week. at $2 per show that would be approximately 64 a month just for the prime time shows.

      This is over the amount i want to save by ditching cable TV. Also no i don't have any spare cash to discover new shows.


      Virtually every prime time TV show can be downloaded from sites like MegaUpload and Rapidshare for free, within 30-45 minutes of when they finish airing. These files are in AVI format, approximately DVD resolution. Normally, 720P MKV files are provided as well. There are various web sites that post links to such downloads. The files get taken down, new copies get uploaded etc. Rapidshare and others impose waiting times between downloads, as well as slow download speeds. MegaUpload usually has decently fast download speeds and large limits for free users.

      You can easily find and download 5-6 shows a night using this method, all for free.

      If you want an even more reliable option, get a private Usenet account for $10-13 a month, use a search site to generate NZB files, and download the shows that way. It's rare that an episode doesn't get posted to Usenet.

       

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    NullOp, Apr 14th, 2010 @ 4:32am

    Net TV

    Enjoy net tv while u can. It will only be a little while before someone finds a way to clog it with commercials.

     

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    Designerfx (profile), Apr 14th, 2010 @ 5:21am

    tv = subsidized

    unfortunately, it's more expensive for us to have internet if we don't have basic cable. Thanks, comcrap. $15/mo higher without basic cable, and $10/mo with it.

     

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      Yakko Warner, Apr 14th, 2010 @ 8:11am

      Re: tv = subsidized

      Comcast was charging us $50/mo for "expanded basic" cable (the cheapest on the menu that had Disney and Nick, the only channels we really watch with kids). Ditched it last month, and they only increased our phone by $5/mo (which, at $45/mo, I'll be switching over to something cheaper soon as well).

      Internet is still about $50/mo though. Might be cheaper if there were any competition in this area...

       

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    PopeHilarius (profile), Apr 14th, 2010 @ 6:20am

    "but to embrace the positive features enabled by the web and apply them to the rest of their business."

    I think this is the key point. I haven't had a TV subscription in eons- in college I got used to watching it on the web and now I see no reason to go back.

    Online, be it from Hulu, Netflix, or infringing sources, you can watch anything ever, at any time. I don't have the patience to keep track of broadcast schedules and set some DVR. I like to come home, and watch whatever I want to. I would pay for a television subscription, but (a common problem discussed here) I'm not going to pay for a service that's less useful to me than something available for free.

     

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    Improbus (profile), Apr 14th, 2010 @ 7:08am

    Ditto

    I dropped my Time-Warner cable TV service almost a year ago but kept the Internet service. I truly haven't missed having on demand cable. Like many here I have been using Netflix, Hulu and Bittorrent. I also use a free program called Miro to get video RSS feeds (highly recommended). This has saved me over $50/month.

     

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    Lance, Apr 14th, 2010 @ 8:06am

    Cost vs perceived benefits

    I actually just dropped my Comcast cable yesterday. I only watched a very select few of the HD channels. As such I could not stomach paying $65 a month after the promotional period ended. Especially when I'm not even wanting the majority of the content being provided. Unfortunately I don't have any other option as Comcast is the defacto monopoly where I live and nothing is making them be competitive in their pricing. My internet is the middle package and on the promotional period costs about $25 a month. Very acceptable. I'd even pay $30 a month for it. But after the promo period is up, the cost sky rockets to $65 a month, just for internet because I don't have a "bundled service". And the 1 megabit (i.e. the slowest) service by itself still costs $45 a month.

    No competition really hurts the consumer and fosters zero innovation for companies in wanting to keep customers. And yes I've checked DirecTV, their prices are just as bad. When will the companies learn to use incentives to keep current customers and not just entice new ones? Much like Verizon does with its new every two.

     

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    senshikaze (profile), Apr 14th, 2010 @ 8:07am

    you can add me to the number of people dropping tv for just internet. too expensive for a few hours(or less) a week of mindless entertainment.

     

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    Idaila, Apr 14th, 2010 @ 8:51am

    Free without TV

    I've been watching on the web for at least 2 years now. Hulu, Megavideo, Netflix (more recently), and where ever I can find the shows I happen to want to watch. I've been putting off getting involved in the Lost craze until it's over, and it's time is coming. We still have a DirecTV subscription which is mostly for my son's entertainment, and the occasional "I want to lay on the couch all day and just 'surf' the channels". The cable companies need to wake up and realize that customers are tired of being tied to their schedules, and despite having a DVR, sometimes it's hard to get back to that show you recorded in time to watch it before you're out of hard drive room. With web-based shows, it's sooo much easier to sit down at your PC and just "watch, pause, watch". In the future I see sites like Megavideo being the norm, providing all the shows people want to see for a nominal fee, with minimal advertisement. ...and those who said that good TV is going to go down the tubes without the money for advertisements, I feel you're right in some ways, but people will make webisodes (see Joss Whedon's Dr. Horrible) inexpensively and almost just as entertaining if the need arises. Change will come and people/industry will adapt.

     

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      Idaila, Apr 14th, 2010 @ 9:02am

      Re: Free without TV

      ...and I remembered something after I clicked! If film makers realize they have to 'give a little to get a little', maybe they'll quit making crap and work on pleasing the consumer. Having to make web viewers happy enough to buy your dvd (see Dr. Horrible again!) will hopefully get them off their rears and get them working for us again. =)

       

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    The Buzz Saw (profile), Apr 14th, 2010 @ 10:38am

    TV will not be missed.

    My wife and I received DISH Network as a gift from her mother. It was nice to watch a few of our favorite shows, but the sad reality is that we only watch maybe 5 of the 100+ channels available. Plus, in the age of the Internet, scheduled broadcast times are incredibly archaic. I want the media to fit around my schedule.

    Now, I am an avid user of Miro, Netflix, and the web in general. I plan on buying a Boxee Box once it comes out. I will definitely not be renewing my DISH subscription when it expires this year. It costs way too much for such little benefit. The DVR aspect makes it tolerable, but it's still ridiculous. If I forget to set a recording timer, I've lost the show forever, essentially. With online podcasts and whatnot, I can miss it by a week and still watch it.

    When I move, I'm going to pour my money into a godly Internet connection. That'll give me way better TV than DISH/DirecTV could ever provide.

     

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    harbingerofdoom (profile), Apr 14th, 2010 @ 10:57am

    as it currently stands, we can go 2-4 weeks in this house without watching TV via cable. and yet im paying money to have the luxury of having it there for my once a month jones for the history channel (which honestly is all i ever use the cable for).

    i am thinking perhaps its time to just cancel it & see how many complaints there are about it after a couple months...
    ...im betting zero.

     

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    Emilio, Apr 14th, 2010 @ 11:19am

    re: Just Do It

    It'll be three years in August since I cut the Cable (they wanted to jack the price up by $17 a month, and would have then jacked it up a second $17 a month six months later, and had shopped me to Lion's Gate as having downloaded some movie from Czechoslovakia that I had never even heard of... So long, Cablevision)

    I've said it before, here, and I'll repeat: It's a strange weight that's lifted when you don't have that box spewing commercials at you at increased volume six or eight hours a day...

    When viewing a particular show becomes a conscious decision, rather than zapping for an hour to find something to watch, you waste a LOT less time exposing yourself to the rest of the crap they're shoveling.

     

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    Rekrul, Apr 14th, 2010 @ 3:16pm

    The biggest obstacle for people ditching cable in favor of watching TV on the net will be the usage caps that ISPs are imposing.

     

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      Improbus (profile), Apr 15th, 2010 @ 9:21am

      Re:

      I consider myself a heavy web/bittorrent user and I have yet to break the 250 GB/month barrier. I can see limits becoming a problem in the future though, especially when the cable companies start moving to DOCSIS 3.0 modems.

       

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        Rekrul, Apr 15th, 2010 @ 10:24pm

        Re: Re:

        I consider myself a heavy web/bittorrent user and I have yet to break the 250 GB/month barrier.

        Not every ISP that imposes a limit gives their users 250GB a month. The capped accounts that AT&T is/was trialing in Las Vegas and another city ranged from 40-80GB a month depending on the account speed.

        A friend in Canada has a 60GB a month cap.

         

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    ElijahBlue (profile), Apr 14th, 2010 @ 9:08pm

    RE: once a month jones for the history channel

    You can find a lot of History Channel's content on Itunes, usually for $1.99 an episode, or from Netflix. Itunes removed the DRM restrictions on their content a while ago, so you can burn just about any movie/TV content you buy from them to a DVD or put it on a video IPOD.

     

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    NSILMike (profile), Apr 16th, 2010 @ 7:20am

    What options would exist for someone interested in live sports and news? I can see how this could replace content that is not time sensitive, but...?

     

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