Articles in this blog post:
“In the Living Room, Hooked on Pay TV”
http://www.nytimes.com/2010/08/23/business/media/23couch.html?ref=consumerbehavior
Question: What are some recent consumer behavior trends that are influencing the industry?
ARTICLE SUMMARY: With the growing power of Netflix and other online video streamers, a new concept has emerged: dropping paying for television all together and just using online streaming. However, while this may seem cheaper and overall better, the number of Americans who have “cut the cord” has not been significant, with the number of subscribers to television being fairly consistent despite Netflix also rising. While many other industries suffered heavy losses due to the Internet replacing them, cable and satellite companies have two distinct advantages. First, several services, like sports games and channels like HBO, have avoided making contracts with online streaming companies, meaning that customers have to still pay for television; second, the companies have adapted to the internet age by letting consumers watch television on their computers and other electronic devices. Still, several people under the age of 45 have begun living without television and many more admit that they could possibly take that course of action also. While cable and satellite numbers remain strong, there is a possibility of big losses, and companies have still already a minor hit in the number of pay-per-view shows ordered.
My Opinion: For the most part, I agree with what the article states. While the likes of Comcast and DirecTV are still taking in revenue, they have to continue working hard to satisfy the consumer. As a college student, I lack a television and I typically watch shows that air through my Hulu Plus subscription and turn to Netflix for movies, as the television in my hall’s lounge is small and inconvenient to use. While streaming is convenient, there are still many restrictions: I cannot watch shows like The Big Bang Theory unless I watch an actual television, while some shows like The Simpsons, while available on Hulu Plus, wait more than a week before being uploaded to the website. Television is also convenient in its ability to have shows already recorded, while with streaming if I want to watch a show I typically have to wait for it to buffer or else the episode will lag – and if I want to rewind or fast forward, it takes a minute to buffer again. As such, there are many perks to television that I miss now that I am in college, though I do not fully know if, after college, those perks are worth the price of spending more for television.
I think that both you and the article are making a very good, and important, point in the trend of consumers opting out of TV for other methods of obtaining the same or similar entertainment. It would be interesting, however, to see the changes in terms of percentage of users that have switched or percentage of population that uses each one; and also to see the rate at which this change has taken place over time. I haven't come across this data yet, but I think it is very relevant in evaluating how this industry is doing. My guess would be that while the new online resources are taking up the majority of the attention in domain of media service providers, the decrease in the users of TV subscriptions (especially if one takes into account that some of the decrease has to do with the recession) is relatively low compared to the entire customer base.
ReplyDeleteThis article definitely calls into question the target markets for these companies. TV/cable providers (such as Verizon and Comcast) have a very different target market than companies that focus primarily on online streaming (Netflix and Hulu). For the latter, the target market is likely younger people (like us) who don't have TVs or who wouldn't get enough use out of an entire cable subscription. The difference in target market is something we should look at in our final paper; just because Netflix and Hulu seem more progressive and convenient for us doesn't mean that traditional providers aren't latching onto customers of a different demographic.
ReplyDeleteI have to agree with Amanda's sttement that "just because Netflix and Hulu seem more progressiv and convenient for us doesn't mean that traditional providers aren't latcing onto customers of a different dmographic". You even said it yourself, you miss some of the perks cable television had to offer. And in terms with convenince...well, some people (particularly the elder generaton, ages 60+) are more used to traditional providers and are not very "friendly" with the internet and other innovations that our generations finds more convenient today.
ReplyDelete-Saida Khamidova