Posts Tagged ‘Cord cutting’
Cord-Cutting: A Slow And Steady Drip, Drip, Drip
- Published on Friday, 30 September 2016 12:28
- Pete Putman
- 0 Comments
An interesting study was just conducted by consulting firm cg42 and it claims that pay TV service providers stand to lose as much as $1 billion in revenue over the next 12 months. The reason? Cg42 says that as many as 800,000 customers are likely to ‘cut the cord’ in an attempt to save money on pay TV packages and bundles.
Cg42 surveyed 1,119 customers online this past summer and calculated that pay TV companies could lose as much as $1,248 per lost subscriber on an annual basis. In their survey, they found that the average pay TV subscriber spends about $187 per month for cable TV, phone, Internet access, and video streaming subscriptions.
In contrast, ‘cord nevers’ – people who have never subscribed to pay TV services – spend about $71 per month on broadband access and video streaming subscriptions. The streaming part of that amounts to as little as $15 per month.
Cg42’s survey revealed that both cord-cutters and cord-nevers don’t care much for traditional TV programming, and 83% of cord-cutters said they can access most or all of the content they want to watch without a pay TV subscription. (87% of cord-nevers said the same thing.)
Perhaps more ominous for companies like Comcast and Time Warner, the satisfaction of watching TV without paying for cable or satellite services increases the longer these viewers remain away from pay TV subscriptions.
The most popular streaming service is still Netflix, which 94% of respondents subscribe to. And number 2? YouTube’s free video channels, which offer selected clips from late night talk shows and musical performances.
Surprisingly, many respondents get their sports fix by going to bars or restaurants to watch games. The survey didn’t mention how many people also watch sports on free over-the-air TV, which of course includes NFL games, selected baseball games and the World Series, the NHL playoffs, and the NBA playoffs, plus the Olympics, golf, tennis, and NASCAR/Indy Car racing.
Surveys like these aren’t anything new. We’ve seen analysts forecasting the end of traditional pay TV packages for several years now. However, there is a real concern about the cost of these monthly services, and whether they’re worth the price.
I’ve advised numerous folks on how to get free over-the-air television and supplement it with streaming services to save money – and in fact, later today, I’ll be visiting someone nearby to do an RF site survey and see how well he can receive the local Philadelphia stations at home (upward of 50 minor channels).
Couple that with broadband service and there’s no real reason to stay with pay TV, especially now that you can subscribe to HBO and Showtime online without a pay TV service. You can also do without landline phone service if you have a mobile phone, further reducing your monthly expenditures.
I said this a few years ago in several columns: The future of cable TV is providing broadband service. Just like mobile phone companies charge you only for data (phone calls and messaging are basically free now), so will cable and satellite companies. They will look more like the electric company, charging you for however many gigabytes you used that month.
And how you use the data will be up to you: sending and receiving photos, streaming video, emails, and voice-over-IP. That’s the real future of Comcast, Time Warner, Charter, Bright House, and other MSOs. The question is, have they accepted it yet?
To Cut, Or Not To Cut: That Is The Question…
- Published on Monday, 11 April 2016 18:00
- Pete Putman
- 0 Comments
A recent report from Convergence Consulting Group states that by their estimates, 1.13 million TV households in the United States canceled pay TV services in 2015, which is about four times the pace of cancellations in 2014.
The report is somewhat humorously called “The Battle For The North America Couch Potato” and shows that even though pay TV subscription revenue increased by 3% in 2015 to $105B and is expected to tick up another 2% in 2016 to $107B, those percentages don’t match up to the rapid growth now being experienced with over-the-top (OTT) video services, like Netflix and Hulu.
Over the same time period, OTT subscription revenue increased by 29% to $5.1B in 2015, and is expected to grow another 20% this year to $6.1B. Now, that’s just 5.6% of the revenue forecast for conventional pay TV this year. But the growth rate of OTT is impressive and is mostly at the expense of conventional cable, fiber, and satellite TV subscriptions.
Convergence also reports that “cord never” and “cord cutter” households increased to 24.6M in 2015 from 22.5M in 2014. It’s expected that number will continue to increase to 26.7M households by the end of this year. (For some perspective, Comcast has a total of about 23 million broadband subscribers, which is more than their pay TV subscriber total.)
It’s no mystery why OTT continues to grow in popularity. Services like Netflix, Hulu, and Amazon Prime allow viewers to watch individual movies and episodes of TV shows on demand for reasonable prices, either as part of a mow monthly subscriber fee or an annual membership fee + small per-viewing charges.
In essence, what OTT viewers get is a la carte TV, instead of paying a hundred dollars or more for a service bundle that includes large blocks of TV channels that never get watched. (The average TV viewer watches about 17 different channels in a year.) And the key to making that possible is ever-faster broadband speeds, which (perhaps ironically) are being offered by cable TV companies to hold off the likes of Verizon’s FiOS, DirecTV, and Dish.
The analogy is of someone providing you the rope with which they will be hung. As Internet speeds increase along with cable bills, the first thing to get dumped is the pay TV channels. With many families, they’ve also dropped landline service in favor of mobile phones, so there’s no need for a “triple play” package (or even a “double play,” which in baseball means you’re out!)
There aren’t enough studies on hand to show how many of those cutters have picked up on watching free, over-the-air (OTA) digital TV broadcasts. And there continues to be disputes between different advocacy groups as to how much of the population actually watches OTA TV: I’ve seen estimates as low as 5-6% and as high as 20%.
Now, the second part of the story: Vizio, a leading TV brand, is now shipping a line of SmartCast Ultra HDTVs that will be “tuner-free.” You read that right; these TVs won’t have an on-board ATSC tuner for OTA broadcasts. An extra tuner would be required, along with an HDMI connection and indoor or outdoor antenna.
Technically speaking, a “TV” sold in the United States MUST have an ATSC tuner built-in, according to the FCC mandate that set a final compliance deadline of March 1, 2007. However, there is no reason why a company can’t sell a “monitor” or “display,” which would not be required to contain such a tuner. (The original FCC mandate exempted monitors that did not include analog tuners from having a digital tuner.)
According to a story on the TechHive Web site, the changes will apply to all of Vizio’s 4K Ultra HD TVs with SmartCast, including the new P-Series and upcoming E- and M-Series sets. In the story, a Vizio representative was quoted as saying that the company’s own surveys showed that less than 10 percent of their customers watched OTA broadcasts, and that a CEA (now CTA) study in 2013 claimed that just 7% of U.S. households used antennas to watch TV.
That figure is obviously low by an order of magnitude. In the 3rd quarter of 2015, the research firm Nielsen found that 12.8 million U.S. homes were relying solely on OTA TV reception, up from 12.2 the year before, and that this number didn’t include homes that are combining antenna broadcasts and streaming. All told, the percentage of homes that use an indoor or outdoor antenna in some way to watch TV probably falls between 10% and 12% – and could be even higher.
So why would Vizio drop the tuner? There’s certainly a cost savings associated with it, and not just for the hardware – there are also royalties associated with the underlying technology. But given that you can buy an outboard ATSC tuner for as little as $40, it can’t be a huge cost savings.
What’s funny about Vizio’s approach is that retailers are offering more antennas and even offering streaming media players and antennas as bundles. I’ve even noticed that the offerings of indoor TV antennas have increased at the local Best Buy (outdoor antennas are still a tough sell; only us hard-core OTA viewers will take the time to install them).
It doesn’t appear any other TV brands are following suit. However, there is a fly in the ointment: ATSC 3.0, which as a completely new standard would require an outboard set-top box or perhaps a USB stick to work with existing TVs. That’s because it supports different transmission modes that are incompatible with current ATSC tuners.
Another wrinkle – there’s no timeline for adoption of version 3.0. Right now, we’re in the middle of the first wave of FCC channel auctions, meaning that the UHF TV spectrum may be somewhat truncated after all is said and done – and many stations will have to relocate. So moving to a new terrestrial broadcast standard won’t be a priority for broadcasters any time soon.
By The Numbers – Or Maybe Not
- Published on Monday, 09 November 2015 15:12
- Pete Putman
- 0 Comments
Several news stories crossed my desk this morning that are each worth closer scrutiny. The first one comes from Reuters and says that Dish Network’s quarterly revenue missed forecasts as more customers disconnected their satellite antennas.
Dish stated that they had lost 23,000 subscribers on a net basis for the quarter ending September 30. In the same time period a year earlier, the net loss was 12,000 subs, almost half as many. And apparently the company’s new $20/month streaming service, Sling TV, isn’t proving to be as popular as expected.
The combination of DirecTV with AT&T also puts Dish at a competitive advantage, since AT&T can offer bundles of service (including mobile telephone) at competitive prices. Satellite TV has always been at a disadvantage to cable and fiber optic services due to issues with reception during inclement weather and the inability of some home and apartment sites to “see” the satellites, ruling out installations.
In my neighborhood, several folks canceled service from Comcast in recent years and picked up Dish and DirecTV as a cost-saving measure, only to drop both when Verizon laid fiber optic cables for FiOS and offered some low-cost, triple-play bundles that Dish and DirecTV couldn’t beat. (Internet service via satellite isn’t exactly fast and reliable.)
Right now, Dish’s most valuable asset is the UHF frequency spectrum acquired in FCC auctions- but it looks like that spectrum may go back for re-auction next February. And the DirecTV / AT&T juggernaut may force Dish into a merger to stay alive – or perhaps an outright sale.
So things aren’t looking too good for pay TV service providers? Not according to TDG Research. In a story on the Multichannel News site, TDG claims that “the percentage of adult broadband users (ADUs) who were moderately or highly likely to cancel their pay TV service in the next six months dropped 20% since last year.”
TDG went on to say that “the group of consumers saying they “definitely will cancel” their pay TV service in the next six months has been cut in half — down from 2.9% in early 2014 to 1.4% in early 2015.” They cite the fact that Comcast only lost 48,000 video subscribers in Q3 2015, as opposed to 81,000 in the same quarter a year ago.
The problem with opinion surveys vs. market trends is that opinions can change abruptly. After a series of mishaps with Comcast’s Xfinity platform earlier this year (and well-documented on this site), I was about ready to throw in the towel and switch over to FiOS myself! But after my original complaint was resolved (replacing the buried cable from the drop to my house) and I wound up with a new modem (802.11ac 2.4/5 GHz), plus much faster Internet speeds and new Xfinity set-top boxes, I decided to stay with the devil I know – for now.
So the TDG data may reflect consumer preferences right now, but what will actually happen remains to be seen when the next set of quarterly data becomes available in January or February of next year.
There’s no arguing with numbers, however. From the Digital Entertainment Group (DEG) comes a report that consumers spent more money on digital video downloads and video streaming through the first nine months of 2015 than on rentals and purchases of DVDs and Blu-ray discs.
According to a story on the TWICE Web site, consumers forked over almost $6.5 billion on downloaded and streamed videos. The “digital” category includes subscription streaming and video-on-demand (VOD), plus digital downloads such as movies to tablets and smartphones. (Like I do when I fly cross-country).
In contrast, the dollar amount spent on rentals and purchases of optical disc media amounted to $6.3 billion – close, but still in 2nd place. From January through September, revenue from downloads and streaming rose by almost 16% Y-Y, while revenue from DVD/BD purchases declined by 14% and disc rentals dropped 7.1%.
Within the streaming/downloads category, the lion’s share of revenue (3.65B, or 57%) went to subscription streaming, while digital downloads captured 21% or $1.34B. The rest went to subscription video-on-demand ($1.41B, or 22%).
What’s interesting is that in 2014, the DEG states that “consumers spent more on physical media, about $6.93 billion, compared with $7.53 billion spent on digital downloads and streaming.” Overall, that means that in 2014, consumers whipped out their credit cards to the tune of $14.46B, or about $1.2B per month. Through September of 2015, that number is $12.74B total, or $1.42B per month – an increase of about 15%.
So there you have it. Cord-cutting (or “dish dumping”) is on the rise. Or maybe it isn’t, if we are to believe the preferences of consumers. Or maybe it’s the HDMI cable we’re cutting, preferring to stream and download videos as opposed to playing them back from optical discs.
One statistic I wish the DEG would delve deeper into concerns the installed base of Blu-ray players – almost 80 million households own one now, according to DEG. But how often are they used for playing movies, as opposed to streaming movies and TV shows from Netflix, Hulu, Amazon Prime, and other services? We just don’t know.
USEFUL GADGETS: Three Antennas and a Preamplifier for Cord-Cutters
- Published on Tuesday, 05 May 2015 12:59
- Pete Putman
- 0 Comments
The cord-cutting landscape has changed considerably in the past twelve months, and it’s no longer a fad, but a growing trend as more and more consumers decide that they can get by just fine without expensive pay TV channel packages.
In fact, Comcast reported yesterday that they now have more subscribers for broadband service than for pay TV channels, which accords greater importance to Comcast’s failure to acquire Time Warner: The combined companies would have controlled broadband distribution to a disproportionate number of U.S. homes.
While Internet service is the key part of cord-cutting, free over-the-air television still pays an important part. Think of the Super Bowl, the NHL Stanley Cup and NBA championships, and the NCAA Final Four championship game.
But there’s also a lot of good programming on free TV right now. In recent months, my wife and I have used our Channel Master DVR+ and TiVo HD to time-shift and watch The Blacklist, American Crime, Brooklyn 9-9, The Good Wife, 60 Minutes, American Odyssey, CSI, Blackish, Saturday Night Live, and Mr. Selfridge (plus a host of one-time PBS programs).
Throw in some Netflix streaming (House of Cards) and there’s plenty to watch without Big Cable. So a balanced cord-cutting approach should incorporate both broadband and terrestrial broadcast TV.
To get the former, you need a fast Internet connection and a late-model Wi-Fi router. To get the latter, you only need some sort of antenna to connect to your television or receiver/DVR, like the Channel Master box, TiVo’s Roamio, Tablo, or Mohu’s new Channels product.
Blessed with a few days of nice weather, I decided to excavate my pile of review products and found three antennas patiently waiting for testing. The first was a rather odd-looking design from HD Frequency, called the CC Aerowave ($49 with 12’ cable from www.hdfrequency.com). It resembles a small window with a 75-ohm coaxial balun attached to the inner corners of two panes.
The second antenna came all the way from Australia and goes by the name HD Quad ($39.99 from www.hd-quad.com). It’s a flexible, transparent antenna with UHF collinear elements, not unlike many other antennas I’ve tested.
The last antenna is a bit larger and is a six-element VHF/UHF yagi, and comes from Channel Master. The StealthTenna 50 (CM3010HD, $29.00 from www.channelmaster.com) can be mounted indoors or outdoors. It’s small enough to sit in a closet or attic space, or even in a room – think of it as functional art.
I also found a new inline signal preamplifier from Antennas Direct. The Juice UHF/VHF Amplifier ($79.99 from www.antennasdirect.com) can be used inside or outside and provides about 18 dB of signal boost with a low noise figure, which is real handy in areas where TV reception can be problematic. (Successful digital TV reception is all about signal-to-noise ratio!)
For this round of testing, I dusted off my tried-and-true UHF bowtie antenna, once available from Radio Shack but largely ignored by retailers today. (Seriously – how many of them want to sell a $5 TV product?)
I set the bowtie up on a folding table in my home office and attached it to a large cardboard box with masking tape. While that part of the test was decidedly low-tech, I then connected the antenna lead into a two-way splitter, with one leg going to a spectrum analyzer and the other going to a Hauppauge Aero-M USB tuner, connected to my Toshiba laptop.
This arrangement allowed me to see the actual waveform and signal strength of each TV station under test. I could then verify successful reception with the Aero-M, and to close the deal, look at the actual MPEG-2 video stream from each station using TS Reader. These three measurements gave me a very concise report on the performance of each antenna.
If you go back to my last round of testing in November of 2014, you’ll see that I used the same antenna position (different box, though!) and same test gear. The only possible differences in testing would come from the amount of foliage on nearby trees, as my house is partially blocked from the Philadelphia/Roxborough antenna towers over a20+ mile path. (In other words, an ideal site for indoor TV antenna testing!)
The Philadelphia TV market is unique in that it has two high-power, low-band VHF TV stations – KJWP (IND) on channel 2, and WPVI (ABC) on channel 6. There are only 40 or so low-band DTVs in operation nowadays as that part of the RF spectrum is susceptible to impulse noise and strange propagation enhancement. Antennas that work well from channels 2 through 6 (about 54 to 88 MHz) are also very large – a half-wavelength dipole for channel 6 needs to be about 68 inches long!
There’s also one high-band VHF operation on channel 12, WHYY (PBS). The rest of the Philly DTV stations are active on the UHF band, starting at channel 17 (WPHL) and ending at channel 42 (WTXF (FOX)). In addition, I can easily pick up three DTV stations from the Allentown area: WBPH-9, WLVT-39 (PBS), and WFMZ-46 (IND). There’s even a repeater for WTXF on channel 38 that shows up on my home antenna array, plus WNJT-43 in Trenton.
I picked a handful of stations to verify reception: WPVI-6, WBPH-9, WHYY-12, WPHL-17, KYW-26 (CBS), WUVP-29 (UNI), WCAU-34 (NBC), WYBE-35 (IND), WLVT-39, WTXF-42, and WFMZ-46. Any of these antennas would be doing an outstanding job if they grabbed all of these stations, as their signal levels vary widely and there’s about 113 degrees directional offset between the Roxborough and Allentown antenna towers.
The first measurements were made with the bowtie, but unamplified and with the Juice amplifier connected. I then repeated these measurements with the HD Quad, CC Aerowave, and StealthTenna 50; again, unamplified and amplified. (I’ll have separate comments at the end of this article on the performance of the Juice amplifier.)
Perhaps the toughest signal to pull in is WPVI on channel 6. Two of the review antennas aren’t really designed for low-band VHF reception, but WPVI runs quite a bit of power and manages to get picked up by brute force on many antennas. (None of the test antennas could pull in KJWP-2 reliably). The rest of the stations aren’t quite as challenging to pull in.
Table 1 shows the results of my tests. Amplifiers do make a big difference, and helped the lowly bowtie antenna and StealthTenna 50 capture first place with 9 out of 11 stations received reliably (i.e. no drop-outs for at least a full minute). To be fair, the StealthTenna 50 is a much larger, directional antenna than the CC Aerowave and HD Quad, both of which should behave like dipoles with classic figure-8 patterns.
Table 2 ranks the antennas by performance. The bowtie by itself wound up in a three-way tie for second place with the amplified HD Quad and bare-bones StealthTenna 50, grabbing 8 out of 11 signals. Following behind was the amplified CC Aerowave, having received 7 out of 11 stations successfully and the bare-bones HD Quad with 6 out of 11 stations.
The Aerowave was a puzzler. By itself, it only received one station – WFMZ on channel 46. I experimented with laying it flat and orienting it at right-angles to the Roxborough antenna farm to try and improve reception, and oddly enough, both of these alignments were more successful than simply positioning the antenna with its face in the correct compass heading. Lying flat, it picked up 4 of 11 stations successfully, while angled at 90 degrees, it grabbed 6 of 11.
The literature supplied with the Aerowave says you can “position the antenna in any desired location,” but based on my results, you may be futzing with it for a while to get the best reception – something I didn’t have any problems with when using the Mohu Leaf, Ultimate, and Winegard FlatWave antennas last November.
ADDING SOME JUICE
Antenna Direct’s Juice amplifier worked much better than expected. Its specifications call for 17.5 dB of gain on VHF channels and 19 dB of gain on UHF channels. (10 dB = 10 times the signal strength, with each 3 dB in gain doubling the previous signal level.) The amplifier’s noise figure was specified as below 2 dB in the VHF bands and below 3 dB in the UHF bands.
In my tests, the Juice boosted WPVI’s signal on channel 6 by about 15 dB and raised the noise floor from about -87 dBm to -85 dBm – or 2 dB, as the specifications claim. All amplifiers generate noise, and a good design will keep that to a minimum to avoid spurious signals and interference to desired signals. (Cheap amplifiers won’t!) Performance was comparable on channels 9, 12, and even 17, where I saw signal levels increase by about 18 dB.
At the high end of the UHF band, I saw an improvement of 20 dB with an increase in noise figure of about 2.5 dB, using WFMZ’s powerful signal on channel 46 for testing. That’s excellent performance for a UHF amplifier and rivals that of the Channel Master Titan-series mast-mounted amplifiers I’ve been using for years. (Titan 2 VHF/UHF 16 dB $65.00, Titan 2 VHF/UHF 30 dB $69, both available from www.channelmaster.com)
I don’t have any data on the Juice’s resistance to intermodulation signal distortion (or overloading from very strong in-band and adjacent-band signals), other than to say that the dozens of very strong FM radio carriers that also broadcast from Roxborough didn’t create any reception issues for me with channel 6 when the amplifier was inline.
It is amazing how little antenna you need to achieve indoor TV reception. My location is sub-optimal in this regard, given my distance to Roxborough and the number of obstructions in my path.
Yet, with just a $5 bowtie antenna, I was able to receive eight TV stations reliably (5 from Philadelphia and 3 from Allentown), including all major networks (CBS, NBC, ABC, Fox, and PBS). Adding the Juice amplifier brought in one more station, and probably fiddling with the bowtie position would have captured the remaining two on my list.
Channel Master’s StealthTenna 50 isn’t exactly small, but you can put it in tight locations indoors for reception, such as a townhouse attic. You can even install it on top of a shelf, or in a closet, and with an amplifier, it will do an excellent job – just use one of the many TV reception Web sites (TVFool.com is the best) to determine the compass heading and where to aim your antenna.
The HD Quad behaves like many other collinear antenna designs I’ve tested. It’s transparent, so you can hang it in a window, and it is a better performer on UHF channels than on VHF. Add an amplifier to it and you may grab a few more channels. One bonus – you can roll it up and take it with you on trips, as I often do. Hook it up to a USB tuner stick and you can watch local HDTV on your computer in hotel rooms.
The CC Aerowave was, to put it mildly, a disappointment. I even tried moving it to different locations, using the spectrum analyzer to peak the signal and see if I could improve those reception numbers. No dice! Some signals that wouldn’t come in at all were now just intermittent with frequent dropouts and frozen images. Adding the Juice amplifier didn’t help much, so I can’t recommend this antenna.
Finally, Antennas Direct’s Juice amplifier is a solid performer and delivers the goods. A noise figure approaching 2 dB in the UHF TV band is excellent performance for the price. There is a puzzler, though – although this amplifier is obviously weatherized, it doesn’t come with a mounting bracket for installation on a mast, which is the best place to out it to overcome signal loss and noise in the antenna downlead. Something for the AD folks to figure out…
It’s All About The Pipes
- Published on Thursday, 13 November 2014 19:37
- Pete Putman
- 0 Comments
It has become increasingly clear that consumers are moving to streaming and cloud downloads to watch TV shows and movies at home. This trend, which has been documented by numerous research firms and news organizations, reached a “tipping point” in 2011 when more video was acquired via streaming and downloads than by the traditional method of renting or purchasing optical discs.
I’ve been staying on top of this phenomenon ever since 2005, when optical disc purchases began a slow, steady decline. A few years later, DVD rentals also turned south and have stayed there ever since. The blue laser format wars of 2005 – 2006 did nothing to reverse this trend: Blu-ray disc sales have not nearly made up for the fall-off in packaged media sales and rentals.
Netflix, of course, carries the blame (or credit) for this reversal of fortune. The company now has over 50 million subscribers worldwide, with over 30 million of them stateside. Their clout has increased to the point where agreements have been negotiated with Comcast, Time Warner, Verizon, and other MSOs to ensure Netflix can stream its movies and TV shows with minimum guaranteed bit rates.
At the receiving end, we’ve seen increasing competition by Internet service providers to boost their download speeds. Although Verizon’s FiOS service lies buried in my front yard, ready for tapping, I still rely on Comcast for video, VoIP, and broadband. (For now, Verizon is a “useful idiot” when I complain to Comcast about ever-escalating costs.)
A quick check with the CNET Broadband Speed Test shows my download speeds at 10 AM average 17 – 20 Mb/s, which is certainly faster than they were a year ago. But they’re not nearly as fast as those encountered in South Korea, Zurich, Brussels, Hong Kong, or even Chattanooga, Tennessee.
An article in Friday’s New York Times explores why the U.S. has fallen behind in providing faster Internet service and offers up some intriguing data from a group called the New America Foundation’s Open Technology Institute. In many countries, governments regulate or control telecommunications services and have made the necessary investments to upgrade their broadband networks.
In contrast, broadband delivery in the U.S. is largely dominated by Comcast, Time Warner, AT&T, and Verizon, who appear to be motivated solely by the bottom line. There are exceptions, such as the aforementioned Chattanooga, where the city offers service through a publicly-owned and operated fiber optic backbone, and Kansas City, where Google took over an existing ISP and has been upgrading to fiber with haste.
What about the rest of Americans, particularly those in areas limited to DSL or even satellite broadband (always unpredictable?) Some hope may lie in the new High Efficiency Video Codec (HEVC), a.k.a. MPEG-H H.265. This codec promises to reduce bit rates by 50% over H.264, allowing delivery of 1080p/60 content to homes with adaptive bit rates in the vicinity of 1 – 2 Mb/s. Not coincidentally, that is the average download speed found in a majority of U.S. homes between 9 and 11 PM at night, when video streaming is heaviest.
Hand-in-hand with improved broadband service comes cord-cutting, or dropping pay TV channel packages in favor of streaming. A recent report by The Diffusion Group shows that 14% of all broadband homes don’t subscribe to pay TV, up from 9% in 2011. The report states that about 75% of U.S. households now have broadband service, so 13 million homes are doing just fine without the likes of DirecTV and Comcast.
I’ve written previously about the growing outflow of pay TV customers and how the pay TV industry saw its first net loss in subscribers in 2013. This trend hasn’t gone unnoticed by media companies: HBO announced last month that it would launch a streaming service for $15 per month that would reach a large, younger population of viewers who have no interest in cable subscriptions.
CBS followed suit the next day, announcing an “all access” subscription for $6/month to all its owned stations, current programming (viewed a day later), and an enormous archive of older yet still popular TV shows such as Star Trek and Cheers (two shows that, ironically, originally ran on NBC!). And yes, there are mobile apps for all of this.
The convergence of cord-cutting and improved broadband connections has economists wondering if we are finally reaching the era of “a la carte TV.” In an intriguing paper posted on the Knowledge@Wharton Web site, the author ponders if consumers would be better off with a la carte (pick your own channels) services, or if costs would skyrocket and diminish the value of choice.
One thing is for certain: Speed drives need. Just as improvements to the highway system in this country led to bigger, faster, and more comfortable cars, faster broadband access (no matter where it comes from), coupled with more efficient video codecs, will lead to more cord-cutting and a shift in video content delivery and consumption online at the expense of conventional TV channel viewing.
It’s all about the pipes…