Binge Watching Phenomena
The Netflix Effect altering the Cable Company Dominance Entirely!
Before the establishment of online television streaming, customers were once forced to watch what was ever on TV. It seems trivial to discuss such a change, but the truth is, the growing popularity of Netflix, HULU, and HBO GO has forced cable providers to rethink their ten year plans for growth and profits. Millions across the world have begun a transition from paid cable to online streaming, allowing the viewer more flexibility in what they watch, while allowing a little more cash to stay in their pocket. It is no surprise so many have purchased monthly memberships to services like Netflix and HULU, as their monthly cost of ten to twenty dollars can save an astronomical amount of money. One could even see a reduction of nearly eighty percent if they were to end cable and stay with only online streaming services.
Heavier Wallets for All!
Though I personally have not yet taken the plunge away from pricey cable, I do see myself leaning more and more to streaming services rather than picking whatever is on the television. So far the only true lifeline cable companies have is live sporting events. It seems very unlikely a transition will be made away from live events, giving cable companies something to work with over the next few years. Sporting events is almost a bargaining chip to keep such high prices for cable channels many Americans do not watch.
One may wonder why American was focused on in that last sentence, when the issue is global, but it was done for good reason. In last few years a transition has been occurring by other cable providers in other countries to make cable more affordable and focused. This has changed how one pays for programming and is making cable contracts more appealing. In Canada, one can only buy the channels they feel they would want and leave the rest off their bill. This is ideal for those who strictly watch ESPN or others who have just one or two channels that conform to their interests. It is basically an “a la carte” style contract and favors the consumer, rather than the provider. This would hit American cable companies hard financially, but may be the only saving grace to avoid a complete transition from cable to online streaming.
Could you switch to Online Streaming Services Entirely?
Overwhelming Wealth in Cable Industry
Next Step for Cable Companies and Online Streaming Giants
So what does this all mean and why should one care? Well for one it means down the road Netflix, HULU, and HBO GO, to name a few, will raise their prices frequently and steeply. This will be due to their growing demand and cables falling profits. As an investor one should see it as a possible buying opportunity or even a major selling point. For companies like CBS, Verizon, Dish Network, and the many other cable providers or television series producers, a change in tide is coming and one must be ahead of the storm. If smart, these mega-billion dollar companies should buy out the current little guys to protect their future earnings, but no such steps seem to be in the making since Comcast and HULU. Establishing one’s own service is another option, but may go as well as Apples attempt to enter the online music streaming provider. Lessons should be learned from the exact failure, which eventually drove the company to purchase an already successful provider, after losing millions to their failed development strategy.
It is hard to predict when such a change in viewer appeal will happen, if ever, but it is something that should be considered now rather than later. Cable companies are some of the strongest corporations currently in the world, but this can change quickly like anything else. For the common man like myself, the only advice I can give is stay aware and wait. Eventually steps will be taken and hopefully you are on the winning end.