Should You Cut the Cord on Your Cable Company?
Post on 21-Aug-2014
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Should You Cut the Cord on Your Cable Company?
Cable TV is getting pricey…
• In 2011 the average pay-TV package cost $86, including premium channels
• By 2020, that cost is forecast to rise as high as $200– Who can really afford to
pay that much?
Rising Costs
Source: NPD Group, https://www.npd.com/wps/portal/npd/us/news/press-releases/pr_120410/
Cable TV is getting pricey…
• Cable channel owners keep charging pay-TV companies more to carry their content
• Pay-TV operators like Comcast, DirecTV, and Time Warner Cable pass that cost on to you!
The model’s broken!
The alternatives
• There are three big streaming video services today– Netflix– Amazon Instant
Video/Prime Instant Video
– Hulu/Hulu Plus
But you have a choice!
The alternatives
• Netflix: $7.99/month– Or $11.99/month if your family
wants to watch more than two things at once
• Amazon: $79/year for Prime membership ($39/year for college students)– Pay-per-view for content not
available on Prime• Hulu: some content is free;
Hulu Plus is $7.99/month
What you’ll pay
The alternatives
• Each has different strengths– Netflix: pay one price, large
content library, original series– Amazon: pay-per-view and
subscription offerings, large and growing content library, other perks
– Hulu/Hulu Plus: free and subscription offerings, current TV shows
They’re not the same!
Let’s take a look…
Netflix
• Got its start mailing DVDs to customers’ homes
• Created streaming video service in 2007
• Started offering standalone streaming service in late 2010
The streaming leader
Netflix
• More than 30 million U.S. subscribers
• More than 40 million global subscribers
The streaming leader
Source: Netflix Q3 2013 shareholder letter
Netflix
• TV Shows– Breaking Bad– Family Guy– How I Met Your Mother– The Walking Dead– Grey’s Anatomy– Law & Order: SVU
• Netflix also has a large collection of movies
Top syndicated content
Source: CNET, http://crave.cnet.co.uk/homecinema/breaking-bad-is-top-netflix-us-show-doctor-who-in-top-10-50012754/
Netflix
• House of Cards• Orange is the New Black• Arrested Development
(4th season)• Lilyhammer• Hemlock Grove• Marco Polo
Netflix is also investing heavily in original content
Amazon.com
• Amazon Instant Video: more than 150,000 titles available to buy or rent
• Prime Instant Video: more than 40,000 titles included with Prime membership– Prime members also get free
2-day shipping on most Amazon purchases
2 services
Let’s focus on Prime Instant Video
Prime Instant Video
• “Tens of millions of members worldwide”– Amazon has never given firm
Prime membership numbers• More than 1 million new sign-
ups in the 3rd week of December– But many members don’t use
Prime Instant Video
Growing member base
Source: Amazon.com Dec. 26 press release, http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1886961&highlight=
Prime Instant Video
• TV Shows– Downton Abbey– Under the Dome– Falling Skies– SpongeBob SquarePants– Dora the Explorer
• Also includes a good selection of movies
Top Prime content
Prime Instant Video
• Alpha House• Betas• Tumbleaf
Amazon is also testing original content
Hulu/Hulu Plus
• Hulu is a joint venture of three big media companies– Comcast– 21st Century Fox– Disney
• Hulu officially launched in 2008
Old media meets the 21st century
Hulu/Hulu Plus
• Hulu is a free, ad-supported service– Primarily offers recent episodes of
TV shows• Hulu Plus also has ads, but has 2
main advantages:– You can watch older episodes for
many shows– Supports viewing on your TV
through connected devices (for most shows)
Two models
Hulu Plus now has more than 5 million members
Hulu/Hulu Plus
• More than 86,000 episodes across 2,900 TV series– Most top content comes
from Hulu’s 3 owners• Not so good for
movies…
Great for TV
Source: Hulu blog, http://blog.hulu.com/2013/12/18/a-strong-2013/
Hulu/Hulu Plus
• 7 of the top 10 primetime shows– Modern Family– The Voice– The Blacklist– Agents of S.H.I.E.L.D.– Scandal– Grey’s Anatomy– Sleepy Hollow
Top shows
Hulu/Hulu Plus
• Hulu is also trying original content– The Awesomes– Behind the Mask– The Wrong Mans
Original content
Which is right for you?
• Netflix: best original content; popular exclusives; user-friendly interface– Limited new release movie/current season
TV content• Prime Instant Video: popular exclusives;
integration with pay-per-view service; lowest price– Limited new release movie/current season
TV content; fewer originals• Hulu Plus: lots of current season TV shows
– No way to avoid ads; few movies; some shows can only be watched on a computer
Strengths and weaknesses
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