Why #CordCutting Is a Trending Topic for 2016

Over the last five years subscriptions to pay TV have been on the decline – a movement that will continue well into 2016. Many subscribers are frustrated with the way cable and satellite companies bundle packages of channels forcing them to pay for content they don’t watch. As a result, more and more customers turn to free or low cost alternatives delivered by the Internet.

Streaming services can save a viewer a lot of money and they can be watched on various platforms just about anywhere, even on a smart phone. Also, the nations’ new favourite pastime (bordering on phenomenon!) of binge-watching - where viewers will watch an entire series of shows almost continually - is easier from web streaming sites such as Netflix.

Bloomberg Business reports that 600,000 Americans cancelled their cable subscriptions in the second quarter of 2015 and estimates around 300,000 in the third. According to Wall Street research firm Pacific Crest the amount of households with cable has dropped by 10% over the previous five years. Meanwhile, Netflix has nearly doubled the percentage of households it services to 35% from 18% in 2011.

Known as cord-cutting, there is a shift from paying for traditional TV to watching streamed video over the Internet. Another term, cord-shaving - where people retain the basic cable package of local channels and cancel the more expensive premium and movie channels - is also gaining in popularity. There are many guides to cord-cutting on line that actively encourage the switch from cable.

Cable TV has been around since the 1950s and originally provided TV service in areas with poor or no reception. For Canadians it was also a way to receive American TV channels from towns across the border. As it expanded it progressed from 7 to 12 channels and by the 1980s specialty cable-only channels appeared that would show movies, sports and news. By the end of that decade most of the channels were cable-only.

By the 1990s cable companies would group channels into tiers that would give customers a choice of content in addition to a basic package. The switch to digital allowed hundreds of channels that would appeal to almost everyone. By 2000, the number of cable subscribers peaked in North America, with the U.S. at more than 68 million. That number has declined ever since.

As the number of premium cable channels increased so did the amount of original programming offered producing a large amount of content. The cable-only format was ideal for adult series like The Sopranos and Sex and the City. The cable networks went on to produce some of the biggest shows on TV. The first online streaming services relied on re-running some of this older subscription programming as well as showing movies.

Free streaming sites like Youtube, Vimeo, Crackle and Metacafe are vying with Netflix, Amazon Prime, Hulu and Shomi that charge a subscription. As the field becomes more competitive, they are trying to attract subscribers by producing their own content unavailable anywhere else. Even the premium networks such as HBO and Showtime are entering the streaming market.

Now the number of original scripted series in North America has nearly doubled in the last six years to more than 400 with streaming services accounting for more than 10% of that total. Not only are streaming services producing their own content but much of it is highly acclaimed. Netflix had several new hits in 2015 including Jessica Jones and The Unbreakable Kimmy Schmidt. Amazon Prime produced The Man in the High Castle and Red Oaks.

For this year Netflix has announced it will nearly double its scripted shows to more than 30 and also produce ten features, 30 kids’ shows, 12 documentaries and 10 standup specials. The other streaming services are following suit by increasing their content offerings as well.

The one thing you do need for streaming from the Internet is a fast connection. The best option is optical fibre, especially with high definition video and the start of Ultra HD video or 4K streaming. The latest technology is now bringing fibre right to the home so there is no bottleneck as in the past when fibre cabling had to switch over to slower traditional copper cables.

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