By Dave Evans
Streaming video services like PlayOn, Netflix, and Hulu are becoming a serious threat to cable and satellite television providers. Each of these services offers customers comparable content for a vastly lower monthly rate.
“Cable subscriptions are falling –- not just because of the economy but because of the growing profusion of streaming video,” said George Yochum, a professor in the Department of Communication Studies at California University of Pennsylvania. “In the end, I suspect the Internet will somehow win out here.”
At a glance, the package deals offered by Comcast and DirecTV seem like a steal. They offer to buy consumers out of their current contract or give a discounted monthly price. And nearly all cable and satellite providers also have a plan that includes Internet -– provided customers sign a two-year contract with the company.
But after the first year, those introductory prices go away, and a customer is left with a bill creeping up towards $100 a month. The money offered to “buy out” your existing contract with a competitor turns out to be a mere credit towards your new bill, leaving you to pay out of pocket for a termination fee. Add that with the rising costs of gas and electricity and what is left is a community without money to spend on anything other than bills -– and groceries, if there’s anything left over.
However, streaming video services are emerging as a popular alternative form of television — and although these services don’t mean suffering through the cheapest broadcast-channels-only cable/satellite package, they cost the same price or less.
James Carter, also a professor in the Department of Communication Studies at Cal U, can shed some light on the subject:
“The basic advantage to the consumer is that [streaming video services] offer competition to traditional content providers, which may lead to lower costs for the consumer,” Carter said. “The other advantage is it allows consumers to view programs when they want.”
Services like Hulu Plus and Netflix are rising in popularity, and it’s no question why -– they both offer unlimited streaming video for less than $10 a month. The plans are both contract-free -– a trend growing even in the cell phone industry. Netflix offers a free trial period of one month and Hulu Plus offers a trial of one week for potential customers to see if they’re interested.
“We’ve been using Hulu for over two years now,” said Jill Coalson, a former resident of Pennsylvania. “It was all we could afford at the time my family moved to San Diego.”
PlayOn, another Internet video service, gives the choice of paying monthly, yearly, or a flat rate lifetime subscription plan, and none of these deals total more than $5 a month. This service is different from others because it uses applications and plug-ins to add channels and expand the content available for streaming.
“It has everything that we like to watch, and it’s commercial-free,” Barry Coalson said of TV-Links, a free plug-in for PlayOn that uploads episodes of nearly every television program just hours after the episode airs on television. “Why should we pay more money for shows we don’t watch?”
Although these services are definitely eating away at the revenue of the cable and satellite companies, Jim Holland, a PlayOn representative, said PlayOn’s service is “nowhere near the size of large cable and satellite companies.
“That being said, many of our customers do use PlayOn as a means to ‘cut the cord,’ and many others use PlayOn as a supplement to their cable or satellite service,” Holland said.
Many cable networks are jumping on the streaming-video bandwagon. Some premium channel networks, such as HBO and Cinemax, have already started their own streaming applications -– HBO-Go and MAX Go, respectively. Blockbuster is attempting the same -– and failing miserably. Amazon even offers a video-on-demand service that is gaining momentum in the streaming video industry.
Streaming video services such as these are a growing trend with parents, partially because of the selection available for their children. Streaming services offer a middle-area for those who don’t want to rid their home of television altogether –- instead, they can choose what programming is appropriate to stream for their family.
“There’s stuff on television that I don’t want my kids exposed to,” Jill Coalson said. ”With Hulu, it’s not like an infant can turn the channel to something [he] shouldn’t be watching –- I make the playlist.”
Most new television sets come ready for streaming services such as these. For customers with older television sets, it is possible to watch via computer or laptop, but using your computer as your television just isn’t the same for some. Luckily, there are more options available.
Through the use of digital video players, or DVPs, these services are easily streamed directly onto your television. Leading the market are Roku and Apple TV, two popular digital video players that both stream Hulu Plus, Netflix, and PlayOn. Roku offers channels developed specifically for its DVP -– including original shows and content only available to Roku customers, whereas Apple TV is geared more towards Mac customers who regularly use iTunes and the new iCloud software.
“I purchased a Roku for the fall semester,” said Christine McCann, 23, a senior early childhood education major at Cal U. “It’s easy to use with Netflix and PlayOn, and it doesn’t take up much space by the television. It fits in the palm of my hand. It’s already saved me hundreds of dollars since my contract with DirecTV expired.”
The Coalsons watch programming on Hulu using an Apple iPad, another popular option for streaming media, along with the iPhone and Android mobile devices.
For those who own a somewhat-modern gaming console, such as a Microsoft Xbox 360, Sony PlayStation3, or Nintendo Wii, purchasing a DVP isn’t necessary -– the gaming consoles are also Internet-ready and offer the streaming services.
“You are using a computer when you stream video,” Carter said. “The newer gaming consoles are, in fact, computers. They just aren’t traditional CPUs.”
Viewer Nicholas Scalzo, 22, of Charleroi, said, “I can’t afford cable or satellite, so I use a Netflix account on my PS3.” He moved to Charleroi in August to attend Cal U in the spring. “It’s usually OK, but sometimes, the Internet times out and it freezes whatever show I’m watching,” he said.
Carter agreed that “A definite disadvantage of streaming media is the possibility of lag time when a program needs to buffer.”
But all you need to evade this downside is a high-speed Internet provider, according to Carter. Holland said such service already is a necessity in today’s fast-paced, tech-savvy world.
However, some have found a way around the Internet bill, too. Supposing someone within the device’s range has an unprotected wireless network, a digital video player like Roku or a gaming console like the PlayStation3 will automatically pick up the signal and connect to the Internet.
On top of that, multiple devices can be linked to one Netflix account, giving the opportunity for a community account of sorts among small groups of people.
“When I lived with my sister at her apartment, we streamed her Netflix account through my PlayStation3,” Donald Davis, 23, of Charleroi, said. “When I moved, I took my PS3 with me and she linked her Xbox 360 to her account. Netflix is still running on my console –- and I don’t pay a dime,” Davis said.
Another issue with streaming media content from the Internet to television is the possibility of piracy. Although Netflix and Hulu profess, on their websites, to be adamant about copyright infringement, PlayOn offers applications and plug-ins from third-party developers –- some of which are live-television feeds of cable channels, such as HBO, Comedy Central, and FX, among others -– with a disclaimer that the company does not take responsibility for the development of third-party applications.
Holland contends that piracy is not an issue that PlayOn faces.
“PlayOn simply screen-shifts content you already have access to,” Holland said. “There are many other products that do the same thing — though with different content.”
Of course, there are downsides to every service. Netflix is hemorrhaging customers following a recent revamping of its system, separating streaming movie services and DVD-by-mail services, effectively raising the price from $9.99 a month to a combined cost of $15.98 a month.
“I ditched the DVD-by-mail, but I kept the streaming service,” Scalzo said of the recent Netflix price hike. “It’s still a better deal than Comcast, but the selection is pretty limited.”
Coupled with the increased cost for streaming service and DVD-by-mail service, Starz has no plans to renew its contract with Netflix. Instead, Starz may make its own digital push, following the likes of HBO and Cinemax. Starz provides movies from Sony Pictures and Walt Disney Studios, which means without Starz, the Netflix selection will indefinitely grow slimmer.
Hulu may be losing some content in the near future, as well. Comcast’s acquisition of NBC puts a lot of influence on the company -– the cable giant may eventually require the television network to sever ties with longtime business partner Hulu.
PlayOn also has its flaws. In order for PlayOn to stream content over a television, a PC or laptop must be running and connected to the PlayOn server –- even though the media isn’t playing on the computer. As Holland explains, the biggest shortcoming with PlayOn is that PlayOn is “essentially a virtual cable running from your PC to your mobile device or television.”
“If you’d asked me a year ago, I’d have said the lack of sports and live news is the main downside to PlayOn,” Holland said. “This was not a PlayOn problem; there were just few live sports and live news streams available. That has changed for the better recently and PlayOn has quickly developed support for these new content streams.”
With services like Hulu, Netflix, and PlayOn, cable and satellite providers could be in for an unexpected drop in revenue. A customer can have a membership to each of these services and still remain under $30 a month -– plus Internet costs. Some customers expect the television networks to restrict their content and suggest this fad will fade out, but others remain convinced that cable and satellite television are things of the past.
“Anything is possible, but I have my doubts that [the demise of cable and satellite TV] will be in the near future,” Carter said. “It would most likely be a continuation of what we are seeing happen already -– the consolidations of providers as cable and satellite providers are merged with content providers. With this happening, then the advantage of lower prices to consumers is less likely.”