There was a time, in the mid-1900s, when you had two choices for TV viewing: broadcast television or cable. Satellite TV and pay-per-view joined the landscape early on, which allowed subscribers to pay for access to a private telecast of a certain event. Each of these options left the viewer at the mercy of programmers and their schedules for the content they wanted to view. TV viewing remained the same for much of the rest of the 20th century until the mid-1990s when cable providers began offering video-on-demand (VOD) services to viewers who chose to pay an extra fee and either download or stream the content directly to a set top box. TiVo arrived in 1999 and encouraged scores of TV watchers to automatically record their favorite shows to view whenever they wanted, with the ability to skip commercials. Of course the trusty VCR had been around for decades by this point, but TiVo offered something other methods didn’t: an easy-to-use interface and a hard drive. No more VHS tapes! Yay!
Options changed much more rapidly for viewers in the early 21st century. Multiple bundled packages were available, ranging in scope from local television stations, broadcast television networks, subscription television services, satellite TV and radio, and private video services. Hundreds of channel options existed, and service providers bundled them together to sell as packages. Netflix arrived on the scene as a home DVD rental service, and quickly expanded into the realm of streaming content. Multiple providers followed suit, and now we have several streaming options, including Netflix, Amazon Instant Video, Hulu, Apple TV, Redbox Instant, not to mention special streaming capabilities offered by various premium channels or broadcasters.
So what is on the horizon for TV as we know it today? The key terms to watch for are streaming and bundling. Here’s why:
Technologies such as VHS, DVRs, and streaming video have, over the years, allowed more and more of the national TV audience to free themselves from broadcast and cable schedules and still enjoy the TV shows and movies that they want to see, at their own convenience. In fact, Nielsen recently released new data showing that five million households in the US do not watch television via cable or satellite providers, but prefer to stream video instead. This represents a rapid increase over the three million “cable cutters” reported by Nielsen in 2007.
Even though 95% of US viewing audiences still watch their TV via traditional broadcasts, streaming technologies are not going away. Many viewers rely on them to watch content not only on their TV, but also on their laptops, tablets, and smartphones. In fact, the amount of video watched on tablets and smartphones in 2012 increased 100% over the previous year. Streaming content subscriptions are also less expensive than cable, leading many people to choose the cheaper and more customizable option. As new viewing technologies arrive, such as 3D and Ultra HD, content providers are again innovating to find ways for viewers to stream these features straight to the comfort of their own homes, whenever they like.
Bundling has long been a mainstay of cable and satellite providers’ subscription packages. So you only want to watch HBO and Animal Planet? Too bad. You have to pay the full monthly cable subscription fee and get hundreds of channels you will never use. It just wouldn’t be cost effective to allow viewers to pick and choose the channels they wanted to pay for. Or would it? Verizon is now in talks with mid-size and smaller content providers to negotiate an agreement wherein Verizon pays for content only when viewers watch a channel for five minutes or more. This would reduce Verizon’s overhead, and hopefully the savings would trickle down to cable subscribers as well.
Apple was reportedly banking on an “unbundling” strategy with its (unconfirmed) plans for an Apple television set. The set was reportedly supposed to include a completely customizable user interface, allowing viewers to pick and choose what content they wanted to pay for. But the cable providers wouldn’t play ball, and the rumors of Apple cracking the cable wall have died down. But the idea is not dead yet. Intel is currently testing a set top box that will combine live TV, VOD, and catch-up options into one service. While the company takes pains to note that the new box is not a complete unbundling of cable services, it does state that it is working with “the entire industry” to include live TV content.
People’s lives are always getting busier and more complex. We juggle jobs and responsibilities as handily as we juggle multiple mobile devices and online services. Sooner or later, viewing habits are going to become so fractured that service providers will have no choice but to unbundle and thrive or remain stagnant and dwindle. The internet and the proliferation of mobile devices have made us all used to getting what we want, when we want it. Sooner or later, we will all get our time-shifted, ad-free, customized TV.