Cutting the cable
Consumers are relying on Internet devices to watch TV. But how do they stack up against the old standby?
When Paul Ohmer’s TV died last year, he couldn’t think of a good reason to have it repaired. So he never did. “I’ve got to say I haven’t missed it,’’ said the retired steelworker who lives in South Boston.
Yet Ohmer hasn’t missed his favorite shows, either. He still catches “Family Guy,’’ “The Daily Show,’’ and “South Park’’ on his Internet-connected laptop. Ohmer is one of a growing number of TV fans who’ve cut the cable, and are using alternative methods to find their TV favorites.
According to market research firm Centris, the average US monthly cable bill is $75. Premium channels, which feature recent movies and other programs, can drive up the monthly cost dramatically, which means real money for cash-strapped consumers during tough times. And indeed, major cable TV companies are losing a lot of customers. The nation’s biggest cable provider, Comcast Corp., lost 275,000 subscribers in the third quarter of the year, more than twice as many as in the previous year, while its giant rival, Time Warner Cable, lost 155,000 video subscribers.
These days, viewers can see lots of shows without a cable box. Both Google Inc. and Apple Inc. sell boxes that bring Internet content to the TV, along with movies from rental services like Netflix, which charges as little as $9 a month. Video game consoles like Microsoft Corp.’s Xbox 360 and Sony Corp.’s PlayStation 3 offer access to movie rentals as well. TV makers are starting to build Internet access into their sets. And those who have relied only on cable since before last year’s transition to digital broadcasting may be amazed at the numerous local stations that are now available over the air, including programs in high definition.
For the most part, that’s how Jason Pink, chief operating officer of Fluorolite Plastics Inc. in Framingham, watches TV: through an antenna attached to his set, augmented by a Blu-ray video disc player that streams Internet video. He and his family miss some of the programs they used to get on cable, but Pink said they’re saving $60 a month since they’ve cut the cable, and he won’t go back. “It’s hard to spend that kind of money,’’ he said, “when you know that Internet content is growing every month.’’
Internet video on living room TV sets really started to gain ground in 2008, with the release of Roku, a $100 box that pumped Netflix movies directly into TV sets, and a deal that allowed Netflix subscribers to watch their movies through Microsoft Corp.’s Xbox 360 game console. Today, Netflix streaming has become a fixture in millions of homes. Sandvine Inc., a Canadian maker of broadband networking gear, recently estimated that Netflix movie viewing accounts for 20 percent of all Internet downloads during the evening.
But Netflix mainly offers movies and older TV shows. Newer programming is often available through the websites of major TV networks, but it isn’t always easy to stream into the living room. Fox, ABC, NBC, and CBS won’t display their programs through the new Google TV box, and NBC and CBS shows aren’t accessible through Apple TV. Internet streaming services also offer little in the way of live news or sports.
That’s one reason why industry analysts doubt that many consumers are ready to rely on Internet TV. Another is the lack of convenience. To watch local stations, movies, and network hits on one TV set, cable cutters might need an over-the-air antenna for local programs and network shows, a separate device for streaming Internet movies, and a broadband connection. Cable and satellite services provide the same programming through a simple set-top box.
Cable continues to dominate TV viewing, and some carriers continue to grow. Verizon Communications Inc.’s FIOS service actually gained 204,000 TV subscribers during the third quarter.
Comcast spokesman John Demming said that surveys of departing customers find that most are switching to a different cable provider or falling back on traditional over-the-air TV broadcasts. Few say they’ll go Internet-only.
“There’s not enough data points right now to say that it’s the Internet video specifically that’s causing people to say goodbye to Comcast,’’ said Kurt Scherf, a cable TV analyst at Parks Associates in Dallas.
But the appeal of cord-cutting is likely to grow as consumer electronics firms unveil more devices that bring online video into the living room. Even some cable providers admit that Internet viewing could eventually pose a challenge.
“It’s no doubt that the Internet has the capability to change the industry,’’ said Joseph Ambeault, director of product development at Verizon. His company is fighting back by using the Internet to deliver cable shows.
Verizon last week launched Flex View, a service to let subscribers download TV shows and movies to laptops and smartphones. “That rental that was trapped on your TV yesterday now has additional value at the same price,’’ Ambeault said.
Meanwhile, Comcast offers similar features through its Xfinity TV online service.
Both companies are betting that consumers will prefer easy access and boundless variety over the Internet’s inexpensive, but limited offerings. For the time being, the evidence suggests they’re right. “I hope for the best,’’ said Ambeault, “and always plan for the worst.’’
Hiawatha Bray can be reached at firstname.lastname@example.org.