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No, Netflix and Hulu are Not Killing Cable

Perhaps we could excuse a little journalistic sensationalism, but to claim “Netflix and Hulu Are Starting to Kill Cable” is either naïve or dishonest. We’ve heard that claim a lot lately based on an Experian study which found cord-cutters (people who have internet but no TV subscription service) went from 4.5% to 6.5% in the last 3 years. Is cable really dying? If so, it’s not dying any faster than we are. At the 2010 to 2013 rate, we’ll all be cord cutters by 2154. Anyone reading this will also be dead, barring any huge advances in life extension. Yes, subscription TV is shrinking, but journalists and social networks seem intent on making a mountain out of a 2% molehill. Beyond trying to make the claim bigger, the same authors have wrongly attributed the change as being driven almost exclusively by Hulu and Netflix. In reality, the same study actually points to something much larger than the two streaming services driving the change. netflix-hulu-graph According to the study, only 18% of “cord cutters” have Netflix OR Hulu. That figure seems even less significant if we realize about 11% of all Americans subscribe to Netflix. The Netflix/Hulu combo may provide enough programming to make some people cut the cord, but a whopping 82% of cord cutters don’t subscribe to either service. Netflix and Hulu obviously aren’t the industry killers journalists are claiming they are. So what’s really causing all the cord-cutting? What about piracy? The Experian study doesn’t contain a mention of piracy or torrenting, but a September 2013 study from NetNames gives us some idea of the scale at which piracy has grown. While cord cutting increased about 44% over 3 years, torrent traffic increased about 245% in 2 years. Torrenting is growing at about 3.6 times the rate that cord cutting is. torrent-growth The study estimated 15% of the 6,692 petabytes downloaded in 2013 was pirated television content. To give some idea of scale, that would be over 1.5 billion hours (over 175,000 years) of commercial-free TV at the most-common 720p compression. These figures don’t even include streaming pirated content, which grew to 1,260 petabytes – a staggering 471.9% increase in 2 years. What about other streaming services? Most major networks and several cable channels have launched their own online streaming services in some form. Amazon Prime has grown, and even the Super Bowl has been available to stream without a TV subscription since 2012. Who knows how many people feel like they can get enough with free streaming services online? What about cable without cable TV? Americans clearly want on-demand streaming TV, but cable providers already know this and work to provide these services while maintaining profitability. For example, Comcast now allows users to access HBO GO without a cable TV subscription. Are we really “killing” cable – or even cable TV – when we sign up for a cable internet package which includes cable-only TV channels? Let’s get real Standard subscription-based TV continues to decline as on-demand streaming grows, but to say cable is dying ignores the changes cable providers have already begun to make. A headline claiming the decline is driven primarily by Hulu and Netflix when most cord cutters aren’t even subscribing to either of those services is downright ridiculous.
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