Rising costs of cable TV lead to a rise in streaming service success

By Shane Soderland

Chart of subscription prices for popular video streaming services. Tribune News Service 2019

Barclay Hotel desk clerk, Ian Gallagher, has owned an “Amazon Firestick” for three years. Before this, Gallagher subscribed to cable TV and recently touted his grievances with their service.

Late Friday nights, Gallagher said he frequently found himself struggling to find something to watch from Comcast’s large catalog of channels.

“I don’t watch that many shows anyways,” Gallagher said. “I usually have TV on as background noise, but [Comcast] pissed me off. They would raise your bill a bit and not tell you about it until it came in the mail.”

Gallagher is one of many to own a streaming device, but not the only one in search of a substitute to cable. Streaming services can serve as an alternative to cable, but each service faces competition within their respective industries.

Over-the-top (OTT) is a categorical term for streaming services — these services allow consumers to sidestep the need for cable subscriptions.

According to a current Parks Associate’s press release, “OTT Video Services: Disruptive Globalization estimates approximately 200 million households had at least one OTT service at home at the end of 2018.”

The press release went on to say, “OTT services will accelerate their global expansion over the next five years, with more than 310 million connected households having at least one OTT service by 2024.”

Netflix says it will be raising their single monthly subscription cost from $8 to $9 — and their HD service will jump from $11 to $13. In response to Netflix, Hulu announced days later that they would reduce the cost of ad-supported service to $5.99, $2 down from its original $7.99 monthly rate.

“With Apple also widely expected to join the video streaming fray, the competition for programming is enabling top directors, writers and actors to charge more for their talents,” wrote AP reporter Michael Liedtke. “That has intensified financial pressure on Netflix, which hasn’t been bringing in enough money to pay for all its programming and other business expenses.”

On the other hand, broadband companies provide similar services with variable price increases. In mid-November, Comcast revealed their plans for the service going into 2019: customers will pay approximately 3.3 percent per month for cable, telephone, and Web services.

Streaming TV is going from a trickle to a flood, with more content, competitors and binge-watching viewers expected in 2019. (Dreamstime)

Recently, AT&T unveiled that their subsidiary DirecTV would be raising its price on most of their provided packages to $8 a month, up from $1 monthly.

Dish revealed they would be bumping the cost of English-language video bundles up from $3 to $5 a month.  Industry experts, tracking their sustainability and profitability, have analyzed these services.

Parks Associates, a company that specializes in market studies, obtains information on consumer products via discussion, trend evaluation and focus groups. According to a recent Parks Associate’s press release, “Currently 13 percent of U.S. broadband households are cord cutters, 7 percent are cord shavers, and 4 percent are cord nevers.”

DCCC geology major, Matt Cross, expressed his feelings about the timeliness of cable services. Cross said that cable services were outdated and that streaming services provided an opportunity for the consumer to pay for channels that they want to watch.

“YouTube does a subscription option where you can pick one channel that you watch or you’re interested in,” Cross said. “You can watch anything on that channel — just as you would live TV, but you don’t have to pay the extra fees of other channels like you would with cable.”

A DCCC journalism major, Michael Hamill, felt streaming would overtake cable in the near future and cited cable as a soon-to-be forgotten relic of the past.

“I think it’s going to go out of business soon,” Hamill said. “The world we’re living in, technology is quickly evolving and 50 years from now [nobody’s] going to know what cable is.”

Isis Lester, a corporate escalations associate for Comcast, voiced her thoughts on the issue. “In reference to the cost of streaming, it’s [beneficial] to consumers because you’re paying far less than you would with cable,” Lester said. “It’s astronomical what these companies charge, almost a car note I see people paying.”

Lester went on to describe her relationship with Comcast and future plans for streaming services. “I only watch it because I get a discount from the cable company I work for,” Lester said. “I am considering Sling [TV] because one of my clients said she had it and loved it. So, I will probably try Sling next.” Gallagher, Cross, Hamill, and Lester said they have issues with cable services, but are optimistic about the future of home entertainment.

According to Market Research Future’s press release, “The global video streaming market is expected to grow at approximately $82 billion by 2023, at 17 percent of compound annual growth rate between 2017 and 2023.”

With the announcement of new streaming platforms, such as, AT&T’s WarnerMedia service, Disney+, and more, are set to launch later this year into next. Experts say the outlook for streaming services is expansive and competitive.

Contact Shane Soderland at communitarian@mail.dccc.edu.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s