Pay TV still better than online streaming, but providers need to ‘act’


In a time when more and more consumers are not only increasingly open to new forms of home entertainment but also carefully weighing the options presented to see which deserve their money, pay TV providers face mounting pressure. Netflix and Hulu Plus may not be on equal footing with Big Cable, but the pair has certainly made headway into both the hearts (and wallets) of millions. Can it last?

A new survey conducted by ABI Research revealed a vast majority that was content to pay a cable bill each month and downplayed the looming threat of “cord cutting.” However, the group also urged cable TV providers to strike now should a sea of change actually occur.


Pay TV still better than online streaming, but providers need to 'act'

“In a relatively fragmented connected consumer electronics market, the pay-TV package is still the best means to get the widest range of content,” said Jason Blackwell, ABI Research Practice Director. “In addition some programming such as sports and premium content is still pay-TV centric, even with TV Everywhere initiatives.”

Indeed, the group announced on Monday that just 10% of those surveyed in its “Technology Barometer: Digital Living” study, which posed various consumer electronics-related queries to 2,000 U.S. citizens, said they weren’t pay-TV subscribers.


A separate study released this month claimed the amount of Netflix users who swore they would cut back on cable costs has doubled since 2010, but as Blackwell pointed out a lack of redundancy in content could keep online streamers from completely cutting the cord.

Regardless, the analyst believes pay TV companies shouldn’t drag their feet on confronting the possible threat – especially since considerable “room for competition and growth” exists.

“Now is the time for pay-TV operators to act,” Blackwell said. “Currently the services on connected CE platforms are commanded by a few early leaders. Netflix and YouTube, for instance, are the clear consumer favorites for online video, while the divide is even greater for social networking where Facebook captures 97% of social networkers on CE devices (compared to 32% for MySpace, the next closest competitor).”

J.D. Power and Associates, a group not yet prepared to sound the death knell for pay TV, today called claims to the contrary “clearly premature.” (via Home Media Magazine)