Yesterday we talked about what it means to be a cord cutter, and if you can be a cord cutter and still subscribe to services such as Sling TV and DIRECTV NOW.
That kicked off a conversation about how long it will be before we see services such as Sling TV, PlayStation Vue, and DIRECTV NOW demanding long-term contracts and skyrocketing fees. Are we just seeing cable 2.0 in the early stages?
We decided to take a closer look at the future of live TV streamed online.
How did cable get to the way it is now?
To understand why streaming TV and cable TV are different, you need to look back at the deals cable TV made with cities. Cable TV started back in 1948 but didn’t really get big until the 1960s and 1970s. I remember when we first got cable TV in the 1980s. During this growth cable TV struck deals with cities to only allow one cable company per market.
That allowed cable to control access for many years until satellite services would get rights to market local channels in the 1990s. Later on you may have had an option from your phone company. In total that meant that, at best, a home owner would have three or four options for pay TV.
This allowed the current market conditions to create cable TV as we know it today. When there is no true competition it allows companies to do as they please.
Why is live TV streaming different from cable TV?
Right now there are four live TV streaming services available nationwide: Sling TV, PlayStation Vue, DIRECTV NOW, and Fubo TV. There is also a fifth, YouTube TV, available in some areas. There are also others (that we know of) about to get into the live TV market including Hulu, Comcast, Verizon, Vidgo, and Centurylink.
So right now there are nine live TV services and three or four traditional pay-TV services available to most Americans. This is a very different market than the one that created cable TV.
With no contracts and a long list of services to pick from cable companies can no longer just force you to pay whatever they want. They will be forced to fight for customers by offering better service and better deals.
What about Internet? Can’t they just use Internet to do the same thing?
The fear many cord cutters have is that Internet price will skyrocket. A well-founded fear as many Americans only have one or two options for Internet in their home.
Yet that is slowly changing as more fiber networks such as Google, Ting, and SFN are rolling out fiber. You are also finding Internet resellers such as Toast.net offering data cap free Internet options for your home.
You also see a big push into 5G that is already starting to roll out in 2017. 5G Internet will give fiber Internet speeds without the need to run fiber to every house. Right now Google, DISH, AT&T, Verizon, and Charter all have 5G test networks live or in the works. Currently the goal is to have half of the United States covered with 5G by the end of 2020.
That would mean that the average Internet option for Americans will move from one or maybe two to five or more options and up to as many as ten options in the next 3 or so years.
We are already seeing this happening for cellphones. A flood of prepaid companies have forced Verizon and AT&T to bring back unlimited data plans and increase the data cap on other plans. The growing list of prepaid options such as Straight Talk have also started to offer less expensive options.
We will likely see the same thing happen to Internet providers in your home; however, you are still 2 or 3 years from this really taking hold.
What does this all mean?
First do not worry about the future of cord cutting. If one service gets silly and starts to put crazy terms on its services just switch.
Even more importantly there was cord cutting before live TV streaming services and there will be after. As more sports and live events become free online and next-day access to shows grows the need for live TV will slowly decrease.
The combination of a long list of services to pick from and growing on-demand options are putting control in the hands of cord cutters. Add in the fact that you will soon have a growing list of Internet options and that will remove the fear of skyrocketing costs and data caps, but we are still 2 or 3 years from that becoming a reality for most Americans.
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