Netflix Users More Likely To Downgrade Cable Services
Netflix Users More Likely To Downgrade Cable Services
Posted 06/16/2011 at 1:20pm
| by Brad Chacos
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The PR tune being danced by Netflix and the cable companies is so nice, it's almost nauseating. Neither side wants to step on the other's toes, so all the press we see is PR spokespeople assuring America that, yes, there is room for both operations and no, Netflix isn't cutting into cable's customer base. A new survey conducted by the Diffusion Group suggests that might not be entirely accurate; even though cable isn't losing too many customers to Netflix, the industry's definitely losing money thanks to digital streaming.
The survey focused on broadband users who both employ Netflix's streaming service and subscribe to some form of traditional television service, such as cable or satellite. Diffusion Group questioners asked whether or not the users were likely to downgrade their traditional TV subscription services in the next six months. Almost a third of all respondents, a full 32 percent, said they would. That number doubled since last year's survey, when 16 percent of respondents said they planned on downgrading.
Why the change? You still find traditional answers, like "Cost of service" and "Need to save money," in many people's explanation of their cable-downgrade plans. But behind that, 34 percent specifically cite online video as the reason for the downgrade. That percentage jumps for Netflix power users; moderate-to-heavy Netflix streamers cite online video, and often Netflix in particular, as the cable-cutting culprit 61 percent of the time.
The numbers cast doubt on the claims that the two industries won't harm one another. Even if a Netflix user doesn't cut the cable cord entirely, ditching expanded services like ESPN and the various premium takes a big chunk out of cable company pockets. How many people need to revert to basic cable before the Netflix-cable dance gets a bit more aggressive? The question isn't if it will happen, notes Michael Greeson, TDG's director of research, but when.
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Silencer
June 18, 2011 at 4:29am
"The question isn't if it will happen, notes Michael Greeson, TDG's director of research, but when."...
When the service quality level surpasses that of digital cable. Right now their streams (over (a customer's) DSL at least) look like bad cams, (very low quality.) They can't control their distribution, as they have to beg ISPs for bandwidth, I.E. often the cable company.
JimmerSD
June 17, 2011 at 5:37pm
Nope, I never paid for the upgraded services in the first place. So the cable trolls aren't losing anything from me.
aarcane
June 17, 2011 at 2:38pm
Every time you stream a file through a router, god kills a kitten.
That said, every time comcast takes a step against net neutrality, I take a step down on their services tier. That said, I recently reached the bare minimum, with no phone, no television, and only the 20 megabit internet which is, sadly, the fastest available in my area, because surewest refuses to cross the street and bring quality service to my home.
kixofmyg0t
June 17, 2011 at 9:44am
I havn't had cable TV since 2001.....and i don't miss it.
The only shows I watch are NCIS and whatever is on G4....and I can get all of that online.
TheDorkSide
June 17, 2011 at 4:52am
I downgraded to just the high speed interenet with Comcast in April after buying a Roku box and trying Netflix out. I should've done this a long time ago. A lot of my kids' shows are on there and my wife can watch all of the chick flicks she wants. We're saving something like $100 a month. I was concerned about the bandwidth cap. With multiple computers and smartphones in the house included we hardly hit half of it.
B.A.Frayd
June 16, 2011 at 11:25pm
I haven't had cable TV for over 6 years now, and I rarely watch TV. Netflix does just fine all by itself (along with my Steam games library). I'll tell you what though, if Comcast lowered their prices dramatically, I would probably subscribe.
monkeyboyx
June 16, 2011 at 10:34pm
What Comcast and all other cable companies need to realize that they are going to be in the ISP service and not TV broadcast. Sorry to tell you guys but that your future. Everything is going online and IPTV...all I need is bandwith and no caps. Its a battle since cable is selling you internet and TV and since more and more shows can be watched online who want to use cable. So they want to institute caps so you use their services instead the internet..GTFO. Netflix, hulu, Xbox, PSN network are going to win.
Ghok
June 16, 2011 at 7:38pm
Because it's a better product.
A cable subscription is not fun to purchase or use.
They need to change their business model. You'd think they'd want to make their service better, but nope... they'll just cap bandwidth instead. That'll do the trick.
I Jedi
June 16, 2011 at 10:34pm
What are you talking about? The article talks about how Netflix members are downgrading their cable service because the user is presented with a better ability to choose what they want to see than what is on the T.V. This has nothing to do with cable providers, as they are just that - cable providers. If you want to point the finger at anyone, point it at the individual stations, such as T.N.T., SyFy, History Channel, etc, who create and choose the programming they air. Cable providers, such as Time Warner and Comcast, only provide an outlet for which these individual networks can reach consumers.
The problem, as we all know, is that people are asking themselves why they're paying $40 + a month for a few shows they watch when they could be renting the shows they want from Netflix at a low rate charge. And bandwidth caps has nothing to do with cable subscriptions, unless there are deals being bundled together for Internet and T.V.
Ghok
June 17, 2011 at 1:11pm
We don't disagree on anything here.
"The article talks about how Netflix members are downgrading their cable service because the user is presented with a better ability to choose what they want to see than what is on the T.V. This has nothing to do with cable providers."
You don't think so? I'll agree that individual networks don't know what they're doing either, but the blame doesn't rest soley on them.
20 years ago I had basic cable. 30 channels. Good channels. Well worth the price. The last time I tried to buy cable there were hundreds of channels worth of crap, the good stuff was hard to find, and I had to buy the channels I wanted in packages for additional cost. Basically I was getting less for more. It was a mess, and as I understand it, it still is.
Bandwidth caps come into play because cable providers know they are losing customers to the internet. They are used to being in control, where things the customers don't like (like channel packages) are the norm. So they are trying to gain this back by discouraging downloading, or at least heavily profiting off it.
Netflix does have an advantage as being a great service, but TV offers some advantages too (especially in conjunction with a PVR). I just don't think as many people would be so quick to get rid of their cable if it wasn't so user unfriendly.
PulsePCTeck
June 16, 2011 at 6:52pm
I can't help but add my cable box to the scrap pile. We have Cox Communications as a Cable Provider in our area. My last phone conversation with them went something like "Blah Blah...all you corporate bastards care about it collecting our money. I hope Cox goes belly up one day and everybody work for them is looking for a job..."
Needless to say, they were all willing to collect my 200.00 a month but were lacking in the service department when I needed something from them.
I am trying to sell both Netflix and Hulu to everybody I meet. We pay for 80.00 a month now for unlimited what ever we want. I realize neither service has "everything", but it sure as hell as unlimited compared to the cost and offerings of just 1 movie channel subscription.
This article is actually funny because I already called Dish Network too see how they can match what I have now. Their only response was trying to sell that the FCC would one day start limited our bandwidth and such...pffff...out with CABLE! Muahahaha!
JohnP
June 16, 2011 at 3:35pm
Heh. I just decided to axe my cable subscription with Cox. I simply just don't watch cable any more... blame Netflix and XBox360 subscription. Box is going out tomorrow.
ddimick
June 16, 2011 at 2:13pm
Ultimately people will stop caring about who their enternainment distributor is, if they haven't already. I don't really care _where_ the stuff comes from as long as it's easy to access. If you want to watch TV, cable/satellite is the easiest, at least for most people. That won't be true by 2020, if not much earlier.
mls067
June 16, 2011 at 1:56pm
The cable companies are just stupid. They have the infrastructure to pull off exactly what Netflix is doing but they offer crap and try to cap everyones data to keep them from using Netflix. It reminds me a lot of what the record companies did when mp3's and Napster came along, instead of inovating, they try to kill it off--like that's going to happen
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