Cutting the Cord, Part 2: Still Small, Still Scary for the TV Biz

It’s the topic du decennie for the television industry: How many people are cutting the cable cord and getting their TV and movie fix from Netflix, Amazon Video On Demand, and other services on new TV add-on boxes such as Apple TV, Roku, and the like, or from other less savory sources? I explored the topic a bit a few days ago, since I’m taking a close look at where television is headed.

This morning, a panel of TV luminaries offered their take at the Streaming Media West conference in Los Angeles. On the panel, entitled Cutting the Cord on TV: Will Online Video Really Lead to Cable’s Demise?, were moderator Jonathan Hurd, director of research firm Altman, Vilandrie & Co.; Bruce Eisen, BP of online content development and strategy for Dish Network; Greg Kampanis, senior VP of content strategy and operations for South Park Digital Studios; and John Paul, executive VP of products for Sling Media.

Hurd said those viewing TV episodes on the Internet daily is still small at 15%, but that’s more than double a year ago. “Cord-cutting, if it’s happening, is relatively small,” he says–about 2% to 4% depending on age group. But the firm asked its survey group if they’ve seriously considered dropping subscription TV services. Most said not, but those aged 18-24 are much more willing–about 25% of them.

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Here Comes Google TV: The Fans (and the Skeptics) Weigh In

If there are many skeptics of Google TV, today at the Streaming Media West conference, a panel of (mostly) fans discussed the potential for the search giant’s newest obsession. On the panel were moderator James McQuivey, an analyst at Forrester Research; Ashish Arora, VP and GM of Logitech‘s Digital Home Group; Christy Tanner, GM of TV Guide Online; Shalini Pai, group manager for partner solutions for YouTube and Google TV; and Jim Lanzone, CEO of Clicker.com. (For more from Google itself, check out my post on Google TV lead product manager Rishi Chandra’s keynote this morning at TechnologyReview.com)

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The Future of the Connected Living Room: Not Far Away

One of the hottest products in the tech business these days are devices intended to bring the Web onto your television. Whether it’s Google TV, Roku, Boxee, Sezmi, Tivo, or any of many other devices, they’re all aimed at taking the Web into the last place it hasn’t yet caught on: your living room.

Today I’m at the Streaming Media West conference in Los Angeles, where content creators, tech companies, and TV people are trying to figure out what’s next in this TV-Web maelstrom–as evidenced by countless panels looking at every angle of this issue that is top of mind everywhere from Silicon Valley to Hollywood and Madison Avenue.

The first panel is Internet-Enabled TVs and the Future of the Connected Living Room. On the panel: Evan Young, director of product marketing at Tivo; Andrew Kippen, VP of marketing at Boxee; Olivier Manuel, director of content for TV maker Samsung; and Dale Pistilli, VP of marketing for disk drive maker Western Digital. The moderator is Dave Habiger, CEO of Sonic Solutions.

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Are You a TV Cord Cutter?

In researching the latest developments in the wonderful world of television, especially the ongoing flurry of devices intended to replace or supplement cable and satellite TV service, I keep coming across one overriding issue: How many people have really “cut the cord” on cable and satellite and moved entirely (or at least mostly; after all, you can still get some broadcast stations for free) to getting their TV fix online? And how many will dump their regular TV service once some of these devices get out widely into the market?

There are certainly lots of choices already. First there are so-called “over-the-top” devices such as Roku, Boxee, Apple TV, and, increasingly, game machines such as Sony’s Playstation and Microsoft’s Xbox. Then there are streaming video services such as Netflix and Amazon Video On Demand. A few companies, such as Sezmi and (let’s not forget) Tivo offer both a box and a service to go along with it. Not least, there’s Google TV, embedded so far in devices such as Logitech‘s Revue and in a Sony Blu-ray machine plus a line of Sony TVs, that is something of a middleman offering a universal content guide, not replacing cable or broadcast TV or your DVR (yet) but blurring the line between them and Internet content.

Meantime, there is some anecdotal evidence that cord-cutting, cord shaving, and never-connected-the cord are real. Some 56 million Americans, a third of the online adult population, have shifted more than half their video viewing to non-live video content, according to an October 2010 study by SAY Media, comScore, and TRU. About 20% of those people are watching less TV than they did a year ago; half subscribe to Netflix.

And that may be just the start. Strategy Analytics says its September 2010 survey of 2,000 Americans indicates 13% of them plan to cut the cable in the next 12 months. Another study in October by Wedbush Securities of 2,500 Americans found that 7% of them had stopped basic cable service and 15% had cut premium services, while only 2% cut Internet service–a possible indication that they’re watching more video online. In the next year, more than a fifth of households making less than $50,000 a year plan to cut the basic-cable cord, according to Wedbush’s survey.

But there’s also abundant evidence that it’s still a very small phenomenon. Nielsen reported in September that 115.9 million U.S. households had TVs for the 2010-11 broadcast season, up 1 million from the previous year. According to market researcher SNL Kagan, cable lost 711,000 subscribers in the second quarter, and even the 495,000 gained by telcos and satellite operators left a net 216,000 deficit–compared with a gain of 378,000 the year before. But SNL Kagan attributed much of that drop to the economy and to last year’s broadcast digital transition, which prompted more people to opt for cable service. And in Comcast’s third quarter, some 275,000 people dropped its service, a lot more than the 189,000 analysts had expected. But both of those are very small numbers next to the more than 100 million American households that subscribe to cable or satellite service.

So what’s your take? Have you cut the cord and gone to Netflix, Hulu Plus, pirate sites, or, say, reading books? Never had cable or satellite? Or alternatively, you can’t live without cable because you simply must have your real-time Project Runway or Mad Men fix, or your husband would divorce you if he couldn’t get ESPN? I’m interested in your own experiences, and intentions, so feel free to comment and/or drop me an email at robert.hof (AT) gmail.

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