SALT LAKE CITY — TV watchers are fleeing from cable and satellite providers at unprecedented numbers, but the exodus appears to be less of a retreat into neo-Luddism than confirmation that more and more consumers are opting for the choice, convenience and pricing of streamed video entertainment.
Getting your TV signal through a wire goes back as far as the debut of broadcast television in the '40s and initially was a strategy for getting those magical moments to consumers who were out of practical broadcast range. (And before anyone waxes nostalgic about the halcyon days of ad-free TV, Bulova paid to have its watches hawked in the first-ever paid spot during a Brooklyn Dodgers game broadcast in 1941.)
Cable exploded in the '80s, and along with it dozens of cable-only networks offering a slew of niche programming (think CNN, C-SPAN, MTV) and, in some cases, fare that was too risqué for the broadcast waves. Residential satellite TV service also popped up as a consumer option during this decade, with EchoStar (later to become Dish Network) and DirecTV coming online.
Since then, pay TV service has been a veritable feeding frenzy for providers with ever-expanding packages, some of which include hundreds of channel options and premium upgrades that can push a monthly bill to nearly $200.
New Hampshire's Leichtman Research Group, which specializes in analyzing broadband, media and entertainment industries, estimates that last year's average monthly cable bill was $103, up from $99 in 2015. Providers have also padded profits by bundling other services, including internet access and telephone.
That rising monthly budget item appears to be playing a role in viewer decisions to cancel traditional pay TV services. While the migration has been in evidence for years, the first quarter of 2017 reflected a surge in that rate, with more than 760,000 subscribers severing their service connections to cable, satellite and telco providers, according to research firm MoffettNathanson.
It's the worst first-quarter loss on record and more than five times the size of last year's first-quarter declines. Currently, cable/satellite subscriber volume is back to where it was 11 years ago.
Chris Brantner, founder of Houston-based CutCableToday.com, said there are several factors motivating the changes.
"I would say cost, which has increased at four times the rate of inflation, is the leading factor in people's decisions to drop their service," Brantner said. "Some sticker shock tends to set in, particularly after promotional deals time out.
"And I hear a lot from people who are just fed up after a history of poor customer service from their providers."
A 2015 Pew report noted that 24 percent of Americans have either cut the cord or have never had cable or satellite service, and among that group, 71 percent said the service was too expensive.
Brantner, whose website serves as a guide for those seeking alternatives to traditional services, said that while options for streaming content continue to grow, users need to be price-aware to avoid moving back to a cable-level monthly bill.
"Cord-cutting purists say you don't need these live streaming services," Brantner said. "They're approach is just hook up a digital antennae and just use an online service for archiving programs.
"But most people want additional programming, which can be had for significantly less than cable or satellite but you need to choose carefully and stay price-conscious."
Utah viewers have embraced the over-the-air method for capturing broadcast television at a rate much higher than the national average. According to data from Nielsen Ratings, as of April, about 21 percent of Utahns were capturing digital TV signals via antennae, compared with a national average hovering around 11 percent.
Pete Ashdown, founder and president of Utah broadband service provider XMission, said the amount of internet bandwidth being occupied by streaming has been growing exponentially.
"Running this company, we keep constant vigil on the stats relating to how our network is being utilized," Ashdown said. "And it's far dominated by streaming video over any other content."
A report by Sandvine, a group specializing in assessing internet traffic data, found that streaming traffic occupies 71 percent of the total evening traffic on North American web networks and is estimated to reach 80 percent by 2020.
Some of the areas that have been problematic for streaming services to address, like live TV and sports, are being addressed, Ashdown said, and from the consumer viewpoint, the reasons not to opt out of cable or satellite are rapidly disappearing.
For Ashdown the customer, he made the switch several years ago.
"I had DirecTV until 2015 but dumped it for Hulu, HBO and Netflix, and immediately started saving $100 a month," he said. "The selection, with access to the archive titles, is so much more expansive.
"It's cheaper, of equivalent or better viewing quality, and just provides much more choice."
In a sign that may reflect the tipping point has already passed, Leichtman Research recently released data showing Netflix has surpassed the top six cable TV providers with 50.85 million streamers compared with 48.61 million cable customers.
BYU communication professor Miles Romney said the current melee of customers fleeing cable/satellite and embracing new streaming options may be headed for a realignment that will be more familiar than not.
"Right now we're in total disruption," Romney said. "Pay providers like cable and satellite are scrambling to figure out how to retool, and streaming services are doing the same on their side.
"Nobody's quite sure how to make it work, but I'm guessing we will see big media come back in which they're already starting to do."6 comments on this story
Romney said he sees parallels in what's happening right now with the wide variety of new streaming and over-the-top (stand-alone) digital programming and the early days of the World Wide Web.
"Remember when we thought the internet was going to be the Wild West? Now the only companies really making money on the internet are Google and Facebook," he said. "I think we'll see something similar in the not too distant future with the bigger media companies bundling it all up again, but this time in the digital market."