As Netflix Leapfrogs Comcast, Here's What Benicia is Watching

The success of online video streaming services Netflix and Hulu — coupled with the high cost of cable and satellite — spells trouble for pay television.

On a rainy Wednesday in Solano County, Benicia was absorbed with a foreign spy thriller movie titled Farewell. Martinez, meanwhile, was watching Matt Damon in the dark comedy The Informant!

The “local favorites” section on the Netflix website provides insight into the top video rentals in each city. But the growth in subscriptions to this online streaming and by-mail movie service proves an even deeper trend.

If you are considering killing your pay TV in favor of Netflix, Hulu or YouTube, then you are not alone. 

Cable, satellite and digital pay television are losing customers in a big way. Meanwhile, online video streaming companies like Netflix and Hulu are expanding. In the first quarter of the year, Netflix earned more subscribers than any network television providers, including Comcast, DirecTV, DISH Network and Time Warner. According to Business Insider, the Netflix jumped ahead to 22.8 million subscribers, beating Comcast for the first time. Netflix also hit a record high on Wall Street with its stock more than doubling in the past year. Around 7 percent of all Americans now subscribe to Netflix. 

The population most inclined to cut the cord from traditional television is “Generation Y,” according to a recent study. Research indicates that these 18- to 29-year-olds may be less attached to their pay TV boxes, more enticed by smaller monthly fees and highly attracted to on-demand viewing. The report, titled “Must Choose TV: What Gen Y Thinks About Pay-TV and Cord-Cutting,” suggests that 60 percent of 18- to 29-year-olds are considering cutting the cord to traditional television. 

So what would a world without pay TV look like? For a start, it could be much cheaper. Netflix and Hulu Plus subscriptions cost $7.99 a month for a streaming-only account, compared to around $64.99 for Comcast’s “Digital Starter” service in the East Bay. Even the cheapest packages from DirecTV and Dish Network — at around $30 — can’t compete with the low prices of online video providers. 

But online services will struggle to compete with pay TV’s coverage of live news, sports and events. The quality of the picture, too, is only as good as your Internet allows with online streaming, while cable, satellite and digital TV boast HD channels and “crystal-clear” viewing.

If Internet video watching continues to gain popularity, it could mean the decline of the ultimate American tradition — the television itself. According to Nielson, the number of homes in the U.S. with TV sets is falling for the first time in 20 years. For now, most people are expanding platforms, rather than replacing one for another. But Nielson notes that “a small subset of younger, urban consumers are going without paid TV subscriptions.”

“Long-term effects of this are unclear,” concluded the Nielson press release. This younger subset could turn to television as they get older and acquire more financial means, or it could mean “the beginning of a larger shift to viewing online and on mobile devices.” 

Are you considering cutting ties with your digital, cable or satellite TV? Why? What would you miss? What won’t you miss? Let us know in the comments below.

Nicolene June 02, 2011 at 02:26 AM
We gave up Comcast almost a year ago and we haven't missed it once (ok, my hubby occassionally misses ESPN), but other than that we have been using our Netflix (both mailed DVDs and stream over XBOX) and Redbox exclusively. It started out as a trial, but it stuck. We still get the 16 or so channels you get with basic cable (for internet) like ABC, NBC etc. We don't miss it, because we don't know what we're missing. We occasionally get to channel surf someone else's cable or satellite and we say, "wow, look at all these channels!" but we can never find anything that makes us question our decision. So many channels, so few watchable shows. We now enjoy picking a show and watching all of it's 12 seasons in a row. But best of all? No more commercials!
Gaia Renee Vacek June 02, 2011 at 01:33 PM
We discontinued paid television service one year ago. It was a conscious decision because of the constant barrage of commercials telling us we needed more, more, more. We have enjoyed watching quality movies and documentaries without the commercialism. It's not about cost really because we still must pay for internet service plus the subscriptions to Netflix and Hulu Plus and other DVD rental services. Total those up and it adds up to around $50 to $60 per month anyway. For us, it became a statement of controlling what information we watched. Yes, my husband, a football fan misses the NFL season. But, now he watches games at friends and families who still have pay cable. Sports playoffs are the same. Other than that, we haven't missed it at all. Our age group? 50 - 60. And more of our friends in our age bracket are doing the same. Reason? Constant commercials and negative programming of violent and disturbing behavior that is becoming more common in everyday life. No, we don't miss it at all!


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