Can Cable TV Survive the Hulu Era?
Is cable TV about to go the way of UHF? Data culled by the Pew Research Center estimates that 22 percent of American adults have cut back or canceled cable within the past year, and within that group, 32 percent have connected their computers to their TVs to view Web video. Not surprisingly, cable TV providers such as Cablevision and Comcast have begun to take notice, and are rolling out their own online video services in response.
“I no longer pick between the TV screen or my laptop screen—my computer serves double duty,” said Twanna Hines, a 34-year-old, New York City-based relationship writer and blogger, who traded in cable television for online video this past spring. “I don’t even own a television anymore.” When Hines is in need of a visual diversion, she points her browser toward Hulu or YouTube. In fact, she’s considering purchasing a large-screen monitor to recreate the experience of watching programming on TV. And Hines isn’t alone.
Time Warner Cable, the nation’s second-largest cable operator, lost 119,000 basic video customers in the fourth quarter of 2008, as the economic downturn caused consumers to second-guess the necessity of premium TV. And although cable companies are doing their best to dangle Triple Play discounts (which includes cable, Internet, and phone service for a low price), some customers are just fed up. Lauren Fairbanks, a 25-year-old blogger who writes about budget living, believes that these deals aren’t enough to entice her to sign up for paid TV ever again. “It’s just too much to pay for TV,” she said. “Cable companies are greedy bastards.” Unfortunately, thanks to the continuing online ad slump—and the fact that broadcasters are searching for new ways to monetize their content—the free online TV party may not last much longer. Growing Online Audience There’s more legitimate television and movie programming available online, and for free, than at any other time in the Web’s relatively brief history. You can watch the latest episode of Lost on ABC.com the day after it airs, catch up with back episodes of 30 Rock on Hulu, and follow the adventures of Star Trek’s Captain James T. Kirk on YouTube.
Hulu, the 2007 joint project between Disney, NBC Universal, News Corporation, and Providence Equity Partners, has experienced tremendous growth, according to data compiled by Nielsen Online. In April, users streamed more than 373 million videos, a whopping 490-percent increase over the same period last year. Due to this increase, Hulu has become the second most popular online streaming video repository; only YouTube (which displays both studio and user-generated videos) eclipses it. The demographic of online viewers isn’t merely comprised of teens and twenty-somethings, either; Nielsen estimates that 29 percent of Hulu’s audience is made up of adults—ages 35 to 49—who are looking for long-form content, not just cute kittens and skateboarding mishaps. Hundreds of movies and thousands of TV show episodes have been available on YouTube’s Shows and Movies channels since its April launch. Although YouTube wouldn’t reveal the exact number of viewers it has, or the number of streams thus far, a representative from the popular video hub gave us a taste of its early impact: The world premiere of Wayne Wang’s independent film The Princess of Nebraska was viewed more than 165,000 times during the first 48 hours that it was live; a number that Variety estimated was the equivalent of landing the 15th spot on Hollywood’s weekly box office charts. “The business is changing fast,” said Graham Bennett, YouTube’s strategic partner manager. “We consider ourselves on the forefront. Clearly, online is the future.” Hulu and YouTube are pushing the television-on-the-Web movement, but the question must be asked: Is forgoing cable TV, which can cost anywhere between $20 to well over $100 per month, for online television and movies a viable option for entertainment seekers?