Tuesday, May 19, 2015

Viewers Dropping Cable for Cheaper Over-the-Air Options

5/10/15 - As many remember quite well, television of the mid-1900s consisted of a few channels for each of the major broadcasting stations: ABC, CBS, and NBC, among some others. Mainly due to the advent of cable and satellite television providers, modern television has hundreds of channels with content ranging from news to information to entertainment. Television has grown exponentially, but the downside of having so many channels is that prices have skyrocketed. Stephen Battaglio, in his L.A. Times article, discusses a recent phenomenon by which many consumers, unable to afford high-priced television packages, have “cut the cord” and gone back to the television choices provided by bunny-ear antennas.

Watchers of recent years have developed their own system by which they are able to watch all of their favorite shows at a fraction of the price for cable. They use “over-the-air” antennas to watch shows on FOX, CBS, ABC, and NBC for free, and use internet streaming programs like HBO Go, Hulu, and Netflix to watch a variety of other content. Since internet is already a necessity in most homes, this method cuts costs significantly.

Already, about 12.3 million homes rely only on over-the-air broadcasting for their television needs. While this is only 11% of total television users, this trend is a warning signal for cable and satellite providers. As television subscriptions go down, internet usage increases dramatically. Battaglio's sources suggest that cable companies recognize this fact and use it to their advantage. Many such companies are beginning to offer broadband internet service to serve as an alternative to customers while more and more households drop television service.

Price seems to be the big issue for most television watchers. Since cable companies are unable or unwilling to offer prices comparable to those of internet providers, the decision is made easy for many consumers. TV-Internet bundles seem to be the way of the future, but this could lead to problems regarding the FCC's ruling about net neutrality. With the new rules, internet providers are forced to give the same internet speeds and connectivity to all users. Unfortunately, this could take away much of the competitiveness between internet providers and reduce their ability to make economically effective partnerships with television providers.

Internet-based television will likely become more common in years to come, as it is the most economically feasible option for most families. What us the point of spending more money to get the same programs? Battaglio predicts that many people will begin to transfer over as they realize that having a cable or satellite connection is not the only way to access their favorite shows.

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