cordcutters

A Growing Trend Of Cord-Cutting Challenges Cable TV Monopoly

It’s time to cut the cord. Across the globe, more and more people are choosing to end a dependency on cable television — or reject it from the get go — in favor of dynamic streaming options.

Today’s consumers have a strong but at times unhealthy relationship with television, attached as if by umbilical cord to cable packages that can be both excessive and expensive. Sure, they feed us direct television access — but in a changing world of entertainment consumption, is it worth it?

Increasingly, many Americans are saying no. Some, called “cord-cutters,” are getting rid of cable TV for various reasons. Others are opting not to sign up to begin with.

Why cord-cutting is on the rise

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Prior to the launch of Internet-based TV streaming, pay TV subscriptions were the only option. A lack of competition between cable monopolies meant expensive and all-encompassing cable bundles. With new options, users can opt out. Here’s some reasons why:

  • TV watchers don’t need or want all the channels cable offers. In May of 2014, Nielsen reported that the average cable subscriber gets 181 channels, but only watches 17. Though the number of total channels has increased over the years, the average amount of channels watched has stayed roughly the same.
  • TV watchers think they are paying too much for cable. And they are, for the most part, correct. As cable alternatives gain popularity, cable companies are also experiencing rising rates, especially for the cost of sports programming. Rising prices make alternatives more attractive.

The implications of cord-cutting

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Cord-cutting, which has risen in popularity from 5 million households in 2010 to over 7 million today, is changing consumer TV watching habits (binge-watching, for example), as well as the entertainment ecosystem. Here’s some of the implications thus far:

  • The youngest adult generation are increasingly likely to be “cord-nevers.” They are 77 percent more apt than normal consumers to choose to stream TV instead of subscribing to cable from the beginning. According to a Forrester survey, only 40 percent of millennials watch live TV every month.
  • The streaming industry is getting super hot. Subscriptions to services like Netflix, Amazon, Hulu, and Hulu Plus are rising and growing in number, with the up-and-coming streaming service Sling TV set to offer a la carte cable channels like the Food Network and ESPN. Some channels, like HBO and CBS, will also offer stand-alone streaming services. Those who don’t cord-cut may “cord-shave” by simplifying their cable subscriptions and supplementing it with video streaming.
  • Cable companies may need to change their games. Cord cutters have put a strain — albeit a slight one — on cable companies. Though subscriptions are down just .1 percent in the last year, the overall unbundling trend is a cause for concern for the telecom industry’s increasingly antiquated cable TV monopoly.

The future of TV

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Right now, big providers like Comcast have the system rigged in their favor — by bundling together the (expensive) cost of Internet with the unnecessary addendum of TV, cutting the cord is not much cheaper, yet, if you need their Internet to enable streaming.

With the FCC set to vote on new net neutrality rules at the end of February, which in place would prevent big ISPs like Comcast from providing some web providers preferential speed, cutting the cord could become either more attractive, or more of a headache.

Regardless, there are a multitude of options for cord-cutters and potential cord-cutters that get around pay-TV with money to spare.

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Jennifer Markert