In this series of articles, BrightReviews looks at the dynamics behind the growing cord-cutting movement, aka getting rid of a cable TV subscription in favor of watching via the Internet. In Part 1 we looked at why this movement began, and now we present you…
Part Two: The Players
There is a battle going on over your TV screen, and we’re not talking about Game of Thrones. This is the War for Your Eyeballs, and in some ways is just as bloody. In this installment we’ll look at some of the key players in brutal battle and see what they have to gain and lose.
Very basically, there are three camps (or is it four?) There’s the basic battle of Cord companies vs. the Upstarts. But somewhere in the middle are the actual content providers, channels like HBO, Disney, and Viacom on one side and Amazon and Netflix on the other; however, as you will see these lines can be kind of blurry.
Comcast, Time Warner, DirectTV, and Dish Networks
These are the Cords – the big, established providers of cable television services that have the most to lose. These companies pay a license fee to carry certain channels, with the largest and most popular (like ESPN) charging the most. But, by selling packages with several dozen channels (sometimes called “bundling”) they claim to be able to provide more variety and support smaller channels that could disappear if an a la carte option were available.
Weapons: They are beginning to offer “skinny bundles” or more bare-bones services with fewer channels as well as including a tv-and-internet package that starts at just $10 more for the 1st year. DirectTV gives their subscribers original programming and Dish has offered their own version of “cord cutting” with Sling TV (see our review here). They are still really the only option when it comes to watching live television, particularly sports, not available on free TV.
Weaknesses: The multi-year contracts that people have to agree to (often with a price hike after Year One) is one of the main reason for cord-cutting.
Google and Apple
Google (now known as Alphabet) and Apple are part of what we’re calling the Upstarts, that are tempting cord cutters with a way to watch television over the Internet. These companies have yet to offer anything in the way of original content, but instead offer hardware that they claim makes it easier to bypass cable and still get access to your favorite shows.
Weapons: Google has Chromecast, a device you plug in to the back of your television that essentially turns it into a computer or “Smart TV”, allowing access to YouTube, Google Play, Netflix, and other content providers via special apps. Apple has Apple TV, which has similar functionality. While both these devices are relatively inexpensive (Chromecast is around $30, AppleTV is $99), you must pay the monthly fees to use Netflix, etc. (Other players are Roku and Amazon Fire.)
Weaknesses: So far, none of these devices offer live streaming of television or sports.
Netflix, Amazon, and Hulu
These are a few of the “alternative” companies that provide content not available with a cable subscription. (However, as we noted above, Amazon has Amazon Fire a hardware device that is now the 3rd most popular, beating out AppleTV in 2014.)
Weaknesses: While they are offering shows and original content you can’t find anywhere else, some feel these companies are spending money they don’t have. If their valuation crashes, it could put the kibosh on new content.
HBO and Showtime
They are yet another category of player – channels that once only were available with a cable television package, but now offer apps that allow for stand-alone subscription.
Weapons: HBO is one of the oldest players in terms of original content and these stand-alone apps provide perhaps the greatest temptation for cutting the cord.
Weaknesses: If HBO Now does succeed in getting too many people to cut the cord, it could end up hurting them. HBO’s relationship with the cable companies gives them marketing and distribution. If they have to do it on their own, they could have less to spend on programming.
Is your head spinning yet?
As you can see, this War is pretty complicated and it in a lot of ways it’s hard to tell who is fighting whom, and who should be the winner! Because, as the New York Times points out, even if you do manage to cut the cord, until there is more local competition you likely have to pony up for a broadband Internet connection from one of the cable providers you just got rid of! And if all the channels become unbundled, you may lose some of your favorites, or end up paying almost the same per month for less overall choice.
Ok, now that we’ve attempted to cover the basic ground rules of what’s going on in the Eyeball War, stay tuned. In the next installment we are going to show you exactly HOW to cut the cable, what to expect, and scams to AVOID! Get those scissors ready…