Netflix, Hulu are ‘no cause for panic’ for pay TV giants

The growth of online streaming has caused some to fear for the future of traditional TV. When people can watch their favorite shows on Netflix or Hulu, what’s the point of paying for cable? Cord-cutting certainly remains a threat to pay TV companies, but new research suggests they may have a few more years to devise their own ways to take advantage of the increasingly popular phenomenon.

Netflix, Hulu are 'no cause for panic' for pay TV giants

A study conducted by IHS iSuppli predicts pay TV isn’t going anywhere anytime soon, with combined “nonlinear programming” – on-demand, DVR and various online streaming options – expected to comprise a little under 16 percent of total U.S. viewing in 2015. The remaining chunk of viewers will stick with the tried-and-true boob tube.

Richard Broughton, Senior Analyst at IHS’ Screen Digest, admitted that while new viewing options have “struck panic” into the hearts of standard TV broadcasters worried over the possible income on their wallets, their really isn’t anything to worry about – yet, anyway.


IHS also cited problems inherent in nonlinear services which prevent them from putting up much of a struggle against the established cable juggernauts – chief among them, a lack of consistent HD-streaming and incomplete content options. On the other hand, Broughton explained that TV networks have made strides in catering to ever-more discerning customers and are well aware of the current pitfalls of online streaming.

“Alongside the evolution of Internet video and DVR technology, broadcasters have introduced HD channels, now received by more than 40 percent of U.S. households,” said Broughton. “In contrast, the Internet in many markets still struggles to cope with HD content and the high bandwidths required for its delivery. Streaming HD remains relatively rare, and downloading takes time, diminishing the appeal for consumers.”

Last month, research group ABI said that cable TV remains “the best means to get the widest range of content,” but urged companies to act now so they weren’t left behind. In June, a poll by The Diffusion Group found that consumers who said they would slash their pay TV spending due to a Netflix subscription doubled this year.

Do you plan on spending less time and money on traditional TV in the next few years? Let us know in the comment section.