Cable subscriptions low since online steaming gained strength

Haley Hays/The News Andrew Skovron, junior from Louisville, Ky., takes a break from studying to watch Netflix instead of cable television.
Haley Hays/The News Andrew Skovron, junior from Louisville, Ky., takes a break from studying to watch Netflix instead of cable television.

Haley Hays/The News
Andrew Skovron, junior from Louisville, Ky., takes a break from studying to watch Netflix instead of cable television.

With thousands of movies and TV-series featured and the amount of users increasing each year, Netflix offers an entertainment experience for all consumers – including college students.

Accessing television shows, movies and Netflix original series has a price tag of $8.99 per month. Other comparable online streaming services such as Hulu and Amazon Prime have fewer subscribers combined than Netflix, according to a Nielson TV survey. The survey, conducted in September 2013, said 38 percent of Americans use Netflix while 18 percent uses Hulu and 13 percent use Amazon Prime Instant Video.

Binge-watching has become an epidemic with the online video streaming service. Nielson’s survey also found 88 percent of Netflix users reported watching three or more episodes of a TV show in a single day.

While statistics show the number of subscribers in America, USA Today reported an estimated 10 million people use Netflix without paying for the service.

An appealing feature that Netflix provides is its original series, only offered by the service. The Netflix original series “Orange is the New Black” won three awards at the Screen Actors Guild Awards last Sunday.

February will be a busy month for Netflix as it welcomes 41 TV series and movies including: “Gimme Shelter,” “Spartacus: Complete Series,” “Earth to Echo” and “Mr. Peabody & Sherman.”

The provider will also say goodbye to 40 TV shows and movies including: “Batman & Robin,” “Ali, Panic Room,” “Red Dwarf: Seasons One-Nine” and “Transformers Prime: Seasons One-Three.” (Source: New York Daily News)

While Netflix thrives off of its increasing amount of members, cable companies are seeing a change in there services. On Jan. 29, Time Warner Cable reported in its fourth-quarter report about a 5 percent or $479 million decrease in revenue when compared to 2013 revenues in video.

This effect is hitting close to home as well. Murray Electric has seen a change in its cable subscribers. Chad Lawson, network technician, said Murray Electric’s cable subscribers are at an all-time high. However, a year or so ago, they moved from having more video subscribers to having more data subscribers.  Lawson said even with the high number of data subscribers, most clients have both cable and data plans.

Lawson said it is apparent that video streaming is attributing to the high data and Internet usage.

“We think of all our streaming to be in the same category, whether it be Netflix, Hulu, Amazon Prime, YouTube, etc.,” Lawson said. “During peak Internet usage times, 70-75 percent of all our Internet traffic is streaming video of some type, with Netflix being far and away the vast majority.” 

Lawson said the industry estimates say that number will be 90 percent within the next 3 years. 

“We mostly see streaming as being a supplement to cable (linear as it is referred to) video service,” Lawson said.

Lawson said, with the increase in the popularity and usage of Netflix, Murray Electric has seen growth in the amount of overall bandwidth usage to the Internet. 

“With this increase in usage, we are having to continuously upgrade our equipment and network to try and keep up with that growth,” Lawson said. “We are currently in the process of doing a system upgrade that, when completed, will allow us to better deliver streaming and other data services to our customers now and for the years to come.”

Netflix started streaming in 1999 and Lawson said he thinks it will advance even more in the next five years. 

“With the onset of higher resolution services (Ultra HD or 4K as it is known), streaming will be the quickest way in delivering that new content that is filmed on that platform,” Lawson said. “With exponential increases in programming costs that cable providers are being charged, the whole cable ecosystem will have to change.”

Despite all the changes and growing opportunities in web streaming, Lawson said he believes younger people are more likely to transition to a web streaming only-environment.

“Younger folks have grown up in a society and environment that has what it wants, when it wants.  I don’t mean that in a bad way, like being spoiled, it is just part of being in a ‘connected world,’” Lawson said. “That is the way a lot of people want their video, when they want it and to some degree, where they want it.”

Lawson said for those who decide to get rid of their cable plan, there are services that Murray Electric can provide to allow users to watch online.

“For all those people that want to ‘cut the cord’ and get all their video OTT (over-the-top content), we will still be here to provide that connection to their streaming services.”

Story by Tiffany Whitfill, Staff writer