The Internet is not killing cable... not yet anyway

Krystal Peak · October 7, 2011 · Short URL:

People are watching more videos online without canceling their cable plans

I fought against it for many years because of the inconsistent viewing quality, the wild goose chases to find the content I wanted and the biggest plague in the industry – buffering. But I can officially say that I am an online video consumer, just like the rest of you. 

People are consuming more videos in the mobile and online space than ever before, according to a
 released Friday from an independent research organization, Heavy Reading.

But the same report also suggests that this boon to those invested in online video also has promise for the cable providers: people aren’t ready to cut the cord just yet.

“At this point there has been no clear drive for people to cut the cord,” Carol Wilson, TelcoTV’s Conference Chairwoman told me, adding that the study focused on finding out how consumers are getting their OTT content and if it is pulling them from or supplementing their standard cable TV time. Video consumption online and streaming on mobile devices is referred to as Over The Top (OTT).

“While the economy is tough and some people are concerned with the price of cable, there is more of a drive to find ways to reduce the price than end their service," she said.

While the final results from the study won’t be released until October 25, some additional nuggets were released including the fact that the quality of the OTT content is a factor influencing the choice of ISP consumers use to gain access to online videos.

“Operators exploring their own multi-screen services, and integrating Internet services into their packages would be well-positioned to tap into this demand,” said Aditya Kishore, a senior analyst at Heavy Reading, in a statement.

Americans were growing their online video consumption – reaching 180.37 million people watching content in August, according to comScore Media Metrix report.  And the number of times Americans hit that play button online grew by a third from 5.7 billion in August of 2010 to 6.9 billion for the same month in 2011.

With nearly 90 percent of the US Internet audience viewing online video content, cable providers can't ignore this segment and are better served supplimenting their content over the airwaves with OTT content.

The constant frustration most common to cable bill recipients is that they are charged a hefty price for a zillion channels, of which they only watch a dozen.

Clearly cable providers are not ready for a la cart pricing but some ground may be made now that the head honchos have seen consumers seeking out the content they want on multiple platforms.

The buzz that Netflix is getting by working in partnership with channels like AMC and IFC could be the compromise that will keep the buffet line of content fully stocked.

But pricing for the consumers, in a challenging economy will keep everyone tinkering with the system for a long time to come.

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