Online Streaming vs. Cable — Who Will Win?

As more consumers engage in online streaming, cable will be at a risk to lose viewership. According to a recent study from Nomura Research, that decline may already be well underway.

Nomura’s February report compiles data from major cable networks that shows a year-over-year drop in ratings of 12.7 percent, a trend Nomura researcher Anthony DiClemente called “one of the worst declines we have seen since we launched coverage of these companies.”

The effect that streaming has on cable is fairly simple. Not only is streaming cheaper in most cases, but it offers the convenience of being available on most portable devices and allows users to watch programs at their convenience.

If cable is going to fall by the wayside, will it happen soon? While streaming is gaining in popularity, cable still controls a good share of the market. Last March, Consumer Reports, citing a Mintel Group study, noted that the average monthly cable bill is $154, with many customers buying bundle options that combined phone and/or Internet with their bill.

This issue is part of the net neutrality debate. Internet providers could begin slowing down or charging more for certain streaming services should net neutrality’s regulations fall. As this RT America story explains, even an entry into the marketplace from a non-cable TV provider such as Google could still lead to price increases for streaming:

There is rampant dissatisfaction with cable. According to the aforementioned Consumer Reports story, 71 percent of subscribers said they would switch cable providers should the net neutrality regulations be tossed out and lead to slower streaming speeds. However, as the Consumer Reports article points out, attempts to switch providers will be tough for most Americans, as many regions are served by just one provider.

In order for streaming to fully overtake cable, reasonable prices and constantly improving speed will have to remain in place for all users. Giving more leeway to cable companies in controlling either one of these factors would change the dynamic of this discussion. While streaming is currently on track to change the way users view television and films, cable still has a measurable influence over Internet service and could gain further control over streaming speeds, ensuring that it keeps its competition from further penetrating the marketplace.

By Zachary Spedden, Graduate Student
Master of Arts in Emerging Media
Loyola University Maryland
This entry was posted in Net Neutrality, Uncategorized and tagged , , , , , . Bookmark the permalink.

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