Online video sites pose threat to cable subscriptions

  • August 28, 2013

By Julia Zucker

Earlier this month, Time Warner Cable and CBS became embroiled in a high-stakes negotiation that resulted in CBS pulling its programming from 3 million subscribers in the Los Angeles, New York and Dallas areas. With the blackout of CBS and CBS-affiliated programming about to surpass the four-week mark this week, one of the key points of contention in this heated battle is the ability of programmers like CBS to do business with online video-on-demand services such as Netflix and Hulu.

Time Warner’s awareness of its video-on-demand competitors is telling, and raises an important question: Will cable go the way of the VHS and analog television in favor of online video services?

“There will have to be pressure on cable companies to unbundle and to provide more channels,” Katherine Bell, assistant professor of communication and media at CSU East Bay, said. “I don’t think cable companies are in imminent danger, but I do think that the landscape keeps on shifting with digital media.”

Since the company’s founding in 1997 Netflix had been a popular site for DVD delivery rentals, but its online movie streaming function catapulted it to new heights in 2007. Hulu was close behind, enabling people to watch thousands of television shows and movies for free, and other similar websites have cropped up in the wake of the pair’s success.

In May, Michael Powell, the president of the National Cable and Telecommunications Association, told the Senate that Netflix is now the largest subscription video provider in the country. The 2012 Q2 earnings report of Comcast, America’s top cable provider, shows a loss of roughly 400,000 subscribers in 2012, while Netflix gained 630,000 subscribers between April and June of this year alone.

“For me, it’s kind of that I want to see what I want to see,” Bell said.

So is it time to cut the cord on cable? As of late, this question has been polarizing television lovers everywhere. Comcast’s Xfinity Double Play subscription for $89.99 a month, for instance, seems outrageous compared to Netflix’s tempting $7.99 a month. Though vastly less expensive than many cable packages, one can see how a dependence on online television providers can become costly and cumbersome.

Caitlin Plummer, a freshman majoring in print journalism feels Netflix should play a supplementary role to cable. “Netflix is great, but the selection is limited and it doesn’t add new shows to its queue each time one airs on cable,” Plummer said. “If you’re using Netflix to watch a TV show, you’re probably watching a show that has already ended [its run] anyway.”

For this reason, many believe that cable television still has as much, if not more, to offer than online alternatives.

“Netflix has some recorded TV and movies, but on the TV you have regular programs, DVR that can record programs and OnDemand,” said Mark John, a technical support representative for Comcast Xfinity.

Despite some of the aforementioned availability problems, online television provides a wide array of options and complete control over when and how to watch them. If an avid Lost fan wants to rewatch all six seasons without paying a hefty price to buy them on DVD, Netflix has him or her covered. For those looking to watch last night’s episode of New Girl, Hulu has it — and viewers can pause, fast forward and rewind it as much as they like. Television websites give viewers a power over what they watch that cable can never provide.

“There’s nothing better than binging on five episodes of your favorite sitcom, and unless you’re lucky and catch a marathon, you’re not going to find that on cable,” Plummer said. “Netflix is amazing for instant gratification because there’s no waiting for the next show to air or for the commercials to finish.”

Needless to say, there are things that Netflix and Hulu can never provide as well. The thrill of watching the Academy Awards or the Super Bowl live and in the moment is a treat only cable subscribers can enjoy, and live news broadcasts won’t be making their way to Netflix anytime soon.

Other innovators, however, are capitalizing on online television’s flaws and cementing their dominion over entertainment. Thanks to the likes of Roku and the newer Chromecast, online television viewers are no longer forced to huddle around their computers to watch their favorite shows. The brand new Google Chromecast, for example, can stream content from one’s computer onto one’s TV via Wi-Fi, no messy cords or setup required. The result: Online television now has advantages in comfort and convenience.

If one thing is certain, it’s that online options have the future on their side: ESPN, for example, is already offering WatchESPN, a live online streaming function.

Cable fans may have to face the inevitable truth that the future keeps on coming, wiping out the old and outmoded and threatening to take subscription television with it. With the Internet’s increasing involvement in most aspects of daily life, perhaps it’s more likely that cable will soon join the cassette and the VHS in the ranks of the obsolete, and society will see television customers make the switch to online viewing.

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