Cable operators blame streaming platforms for declining subscribers

Digital platforms like Netflix or Hulu, which offers unlimited access to movies and TV shows over the Internet, are revolutionizing the television in the U.S. In
2011, cable companies cancelled out more than a million subscribers for their subscription to go to streaming -system that allows them to view web content while downloading.

The figure can go to a staggering three and a half million by the end of this year, representing 3.6% of total cable or satellite users in the country, according to an annual survey of Canadian
Convergence Consulting Group released this week.

These figures not only confirm a trend observed since 2008 but according to the latest reports, 2.6 million Americans decided to consume content via streaming
between 2008 and 2011. The survey indicates that in 2008, 93% of respondents preferred the cable television, a figure that dropped to 69% in 2011. The same study, in 2009 reviewed only 4% user’s watch a movie online,
a percentage that has increased by 14% in 2011.

Netflix, Hulu and Amazon have managed to attract a large number of customers by offering Internet content in real time at very affordable prices. Netflix offers their 21.7 million customers a wide range of movies and TV in
streaming. They have been successful making an agreement with Weinstein Company that allows them to offers cheaper rates to the subscribers. 

An average subscriber of the cable pays about 74 dollars a month and consumes approximately 240 hours of television, which would amount to about $ 0.31 per hour or 0.62 Euros per person, according to the study of Convergence
Consulting.

In addition, these companies are finding a new threat, competition from the same cable companies that are creating their own online content platforms. The leading cable television in the U.S., Comcast, began
to offer its 22.3 million subscribers a service of streaming called StreamPix, which plans to expand to non-subscribers.

Verizon, another cable operator, will launch with Coinstar’s Redbox, a similar website for $ 4.99 a month, three dollars less than Netflix.

Cable providers, given the threat to their business posed by these new platforms, have decided to imitate them. Netflix are reportedly negotiating with the cable platforms. If speculations are to be believes they
are talks with HBO, a chain with 29 million subscribers.

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Posted by Farasat Ali on Apr 6 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry