They call it 'cord cutting'.
That's where you stop paying your expensive monthly cable or satellite subscriptions in favour of watching online video. You 'cut the chord'.
In fact it's likely that young adults will never pay for cable in their lives having been brought up online, so the cable future is bleak anyway. And the number of 'cord cutters' is increasing at a dramatic rate year on year.
In turn, as you'll read in another blog here, as subscribers are moving away from cable so too is the cable viewing audience obviously declining (by -11% last year). Less subscribing, less watching and ultimately, less advertising.
Of course too, the highest percentage of cord cutters are those with a Netflix or Hulu account already - as you'd expect - but in recessionary times with so much content online, subscriptions are being cut anyway. At averaging $200 a month, it's no wonder.
Pay TV is going to be in decline forever. And on this side of the world, that means 'Sky'. What they might resort to is monthly caps or limits on access with a more "tiered" approach - practically 'pay-per-view'. If I was them, that's what I would do.
I do understand that there's more revenue in the stability of monthly subscriptions and that's one model. But given the swiftness and steepness of the decline of that model, you have to do something else or be eaten.
Introduce a pay-per-view option to supplement your subs.
But what it does point to, is the future for growing demand for online video, is bright.
Cable TV is sinking. Fast.
2013 was its worst year on record with a -11% decline in audiences.
Fox, MSNBC, CNN and so on have been in decline since 2009 and largely because 82% of Americans get their news from desktops or 54% from mobile devices (according to Pew Research). But we knew that anyway.
The sharpest decline was in their lucrative primetime spots.
Yet, their advertising revenue is growing!
So what we are seeing is the time lag between audiences declining and advertisers moving to digital. More than a little crazy...but it will come. Advertising money follows audiences as sure as night follows day.
Online media is of course, showing growth as a result.
And it would seem that the core problem here is news what has traditionally been the 'hook' for TV viewing. The scheduling needs of traditional TV for their 6 o'clock and 9 o'clock breaks, means that their news is 'out of date' by that time having been broken online, earlier in the day.
Last year, over 18% of US households with a Netflix or Hulu account, dropped cable. So by not having it, obviously decreases viewing.
Traditional TV Broadcasting, is over as we know it.
The US Supreme Court might decide the future of Television, today.
Aereo, a start-up, rebroadcasts TV content like Fox, ABC, NBC, CBS on the basis that those signals are free and in turn it charges customers to watch them (about 8 usd a month).
Subscribers can watch, record and see a lot of content on their various devices.
But cable companies like Time Warner and Comcast, pay those broadcasters billions, to be allowed re-broadcast their content. They in turn sell it on to consumers as part of a cable subscription (like Sky).
Broadcasters have sued Aereo on the basis of copyright infringement. However, if Aereo's model is found to be legal, this will be a dramatic day for cable companies and for traditional TV broadcasters.
If Aereo loses, it might have to shut down. If it wins....re-broadcasting free signals is now going to expand and perhaps broadcasters will be forced to do it themselves and by-pass cable.
For example, NFL (America Football) would overnight be "free to air" through re-broadcasters online.
But of course, the bigger picture is copyright and as to who owns it and what rights the copyright holder has.
However, the even hugely bigger picture is that TV Broadcasters have now to resort to legal actions to defend their business. Always the sure sign that technology has overtaken them. And it has.
