‘A CATACLYSMIC UPHEAVAL’
Streaming costs, channel choices beginning to look a lot like cable TV, experts say
If you’re one of the countless consumers thinking about “cutting the cord” — dropping cable television in favor of subscribing to one of the many streaming services currently on the market — experts say it may be a good idea to watch the trends and weigh the costs carefully.
Alternatives to traditional cable television service such as streaming video and satellite TV have seen tremendous growth over the past few years, even more so since the onset of the coronavirus pandemic and associated restrictions.
Internet use since the virus forced lockdowns and business closings has increased by 70 percent, according to Forbes magazine. Use of streaming services has increased by 12 percent over that same time period.
But some of the alternatives to traditional cable television have been increasing their prices and dropping some popular channels of late. And if those moves irritate enough consumers, streaming services could be headed for pushback, industry experts said.
Lon Seidman, an Essex technology expert who reviews products on his YouTube channel, said consumers are beginning to recognize that the cost of subscribing to multiple streaming services — plus the price of high-speed internet to deliver them — is reaching the same level as what cable subscribers pay for a single, comparable product.
“They are essentially becoming the same thing as cable,” he said.
Take YouTube TV as an example. While its popularity has increased, so has its monthly subscription fee.
YouTube TV at the start of summer increased its monthly subscription rate from $50 to $65 per month; when the service debuted three years ago, it cost $35 per month.
“...this new price reflects the rising cost of content and we also believe it reflects the complete value of YouTube TV, from our breadth of content to the features that are changing how we watch live TV,” YouTube TV said in a blog post at the time of the increase.
“We don’t take these decisions lightly, and realize how hard this is for our members,” the blog post said.
YouTube TV has eliminated both New England Sports Network and the YES Network, as well as The Tennis Network.
Customers of satellite television provider Dish Network, meanwhile, may have seen their channel choices look a little lighter for a time.
Dish Network and NexStar Media Group had been engaging in a dispute over programming and prices. Dish Network is owned by AT&T and NexStar is the parent company of New Haven-based television station WTNH.
So, earlier this month, NexStar’s 164 stations either were dropped by Dish or pulled from Dish’s lineup by NexStar, depending on which side of the argument a consumer lands.
Then, “Nexstar TV stations returned to Dish Network’s lineup on Christmas after a 23-day blackout,” Variety reported. “The sides struck a deal late on Christmas Eve to restore 164 Nexstar stations and WGN America to the satcaster’s lineup.”
Seidman said, prior the deal being struck, “No matter what, consumers are the ones who are losing.”
The roots of retransmis
sion rights can be traced back to the early 1990s, according to Seidman, when the federal government allowed broadcasters to charge cable television providers to carry their signals. Over time, these charges “have turned into a major generator” for the broadcast television stations and their owners, he said.
Competing for viewers
Cable and internet service provider Comcast, meanwhile, is hedging its bets by offering its customers two choices for getting their favorite programming.
“Consumers are hungry for high-quality video content during what is arguably the best era of programming in viewing history,” said Kristen Roberts, a Comcast spokeswoman based in Connecticut. “Being able to bring entertainment into our customers’ homes remains our focus, but we’re no longer thinking about this as it relates to our pay-TV customers. We see every Xfinity customer, whether they take our pay-TV service or just Internet, as an entertainment customer.”
Roberts described the company’s Xfinity X1 service as “a leading platform for aggregating programming including broadcast, sports and streaming services.”
X1 offers subscribers options including HBO
Max, CBS All Access, Peacock, Hulu, YouTube, Netflix, Amazon Prime Video, Pandora, NPR One and iHeartRadio, and soon will add Disney+. The service comes with a voice remote so customers can easily search for programs, change channels and get recommendations for programming they might like.
Though Comcast officials stress the company offers a variety of pricing plans, new subscribers can lock in the cable television service for $89.99 a month for two years, plus applicable fees and charges.
Xfinity Flex is a free feature for customers who buy internet service from the company.
Flex is a streaming device that includes a voice remote as well as an integrated guide for accessing popular streaming video and music choices.
Comcast’s Internet-only service ranges in price from $39.99 a month to around $95 a month, depending on speed, according to information on the company’s website.
Seidman said Comcast’s offerings are a smart business move.
“They may lose you as television customers, but they’re still keeping you as an Internet customer,” Seidman said. “Ultimately, I see them getting out of the cable television business altogether,” he said. “Just charge for the pipe into
your home. They are making far more supplying Internet access.”
As far as streaming services, there essentially are two types: Those that provide video on demand and those that offer on-demand video as well as live television.
YouTubeTV and Sling TV, which is subsidiary of Direct TV, are examples of streaming services that also offer live television options. YouTube TV currently has 3 million subscribers, while Sling TV has 2.6 million.
But their subscriber bases are dwarfed by Hulu, a streaming service owned by The Walt Disney Co., with 36.6 million subscribers.
These services offer various levels of services based on number of channels.
Sling TV’s cheapest plan has gone up from $20 a month to $30 since the service debuted in February 2015, according to the website cordcutting.com. Hulu’s subscription plan was set to rise to $64.99 per month last weekend, a $10 per month increase.
In October, Hulu dropped a dozen Fox regional sports networks along with the YES Network, which airs the bulk of New York Yankees games, according to multiple reports. It also dropped the Marquee Sports Network, which telecasts Chicago Cubs games.
Netflix and Amazon Prime Video are examples of solely video-on-demand streaming services. Netflix has 95.15 million subscribers while Amazon Prime Video has 126 million.
Netflix raised its monthly fees in September by $1 a month for its standard plan and $2 for its premium tier. It now costs $14 a month, while its premium tier costs $18 a month.
Amazon Prime Video is included for Amazon Prime customers, and offers a multitude of free programming, with the option to purchase or rent additional shows and movies.
One way consumers may be able to get around getting caught in the middle of the perpetual battle over broadcast transmission rights is a nonprofit streaming service called Locast. The service is allowed to rebroadcast local television signals thanks to a what Seidman calls “a little carve-out in copyright law.”
“It’s essentially a nonprofit translator service that asks for a donation of $5 a month,” he said. Locast is available in nearly twodozen television markets nationwide, although not in Connecticut.
Looking ahead
Both Seidman and Rich Hanley, an associate professor of journalism at Quinnipiac University, said it is likely some of the streaming services currently available in the market may not make it over the long haul.
“The whole ecosystem is undergoing a cataclysmic upheaval,” Hanley said.
That upheaval already has started to some extent, according to Seidman. Sony Interactive Entertainment pulled the plug on its Play Station Vue service in January of this year.
“Unfortunately, the highly competitive Pay TV industry, with expensive content and network deals, has been slower to change than we expected,” Sony officials said at the time the announcement was made. “Because of this, we have decided to remain focused on our core gaming business.”
Seidman said what streaming service operators and other programming providers ultimately must come to terms with is a hard truth regarding the consumer-driven economy.
“If the economic model of a (programming) channel can’t sustain an arrangement in which it is viable without subscriber fees, that channel isn’t going to survive,” he said.
Hanley said it likely will be three years before the new reality for streaming services takes place. The National Football League’s television rights are up for renewal in 2023 and, because of the popularity of the sport, streaming services are likely to seek a bigger piece of the action, he said.
“The TV ecosystem will be remade by this because the NFL delivers the largest audience tuning in at one time,” Hanley said. “There are more players than ever (in the battle for TV rights) and there is more money than ever. Streaming services are going to have pay more in order to get access to more games and that’s going shape how much they spend for other programming.”
Right now, the Amazon Prime Video streaming service has broadcast rights to Thursday night NFL games. The e-commerce giant has been airing NFL games for the past three seasons, and is simulcasting 11 NFL games this year with Fox, as well as being the exclusive broadcaster of one other game.
With various streaming services offering different networks or groups of channels, consumers may find themselves adding more and more individual subscriptions in order to have the collection of channels they want.