Millions of Americans have canceled their cable TV subscriptions in the last decade, choosing instead to get their video entertainment over the internet. A growing number of services have popped up in recent years that offer cable-like live-TV streaming for this audience: Sling TV, DirecTV Now, PlayStation Vue, YouTube TV, with Hulu planning to launch a competitor soon, and Comcast reportedly looking to get into the fray. Yet, despite the multiple options and the large potential market of cord-cutters and cord-nevers, these platforms have yet to win over the masses.
While most companies have been cagey about their subscriber numbers to these relatively new streaming platforms, analyst Dan Rayburn estimated this week that Sling TV — the oldest of the existing live-TV services — has around 1.3 million subscribers after more than two years of availability.
In all, predicts Rayburn, this entire market will have a total of fewer than 3 million subscribers by year’s end. While that’s not horrible, it’s only a fraction of the potential audience for these services. Even the estimate of 1.3 million Sling subscribers is about one-tenth the size of parent company’s Dish’s subscriber base.
AT&T’s DirecTV Now reportedly got off to a decent start, adding 200,000 subscribers in its first month, but it’s unclear how many of those people have stuck around or how many subscribers have been added in the months since.
So why haven’t the many millions of people who have cut the cord, never had a cable connection, or really hate their cable company rushed to give their money to these services that are generally less-expensive than pay-TV, and don’t require contracts or leased hardware?
We have some thoughts.
1. They’re Too Much Like Cable
The dream of many cord-cutters is the ability to cherry-pick the channels they pay for, but — in spite of Sling’s potentiall misleading “A La Carte TV” slogan — none of these live-TV services come even close to fulfilling that goal.
At best, they provide somewhat affordable alternatives to basic cable, but what are the odds that Sling TV subscribers are regularly watching more than 4-5 of the 20+ channels they have to pay for?
Additionally, DirecTV Now and PS Vue have largely copied the cable TV model of charging different rates for tiers of channels. For example, if you want NFL Network on PS Vue, you’ve got to pay for the mid-level “Core” tier that is $5/month more expensive. Yes, it also includes a bunch of other channels, but you may not want any of them.
2. Some People Still Like Pay-TV
While traditional cable companies have indeed lost a lot of subscribers as video streaming has become more popular, it’s still the overwhelmingly most popular way to get TV.
Since 2007, Comcast has lost around 3 million video subscribers, but it still has more than 21 million households paying for TV service. And its video subscriber losses appear to have flattened in recent quarters. That doesn’t mean the cord-cutting is done; it’s just an indicator that — as we get to in a second — many people aren’t ready to replace their current setup with live-TV streaming.
3. Playing Wait-And-See
Even though video technology seems to change on a moment-by-moment basis, consumers aren’t always eager to be the first to test the latest thing, especially if it means having to ditch the system you’re familiar with.
There continue to be hiccups and issues with the current streaming platforms — connection errors; lagging, stuttering video; hardware requirements; geographic and content limitations — that most people don’t feel they need to worry about with cable.
The lack of DVR service in Sling, DirecTV Now, and Vue have also not helped. Vue offers an ability to tag shows that will be remotely stored, but watching “recorded” content on the Sony platform can be so much of a chore that you don’t want to use it. Likewise, many networks and shows on these platforms don’t allow DVR functionality like pausing or rewinding.
Despite these streaming platforms being marketed as cable replacements, their user interfaces often appear to have been designed by people who have never seen a basic TV listing grid, and often present the platform’s
So there are certainly some potential cord-cutters — how many, we can’t even begin to estimate — just waiting to be convinced that these platforms will work and offer them something worth going through the hassle of canceling their cable subscription.
After all…
4. Breaking Up With Cable Companies Is A Pain
Aside from multi-year contracts that can result in hundreds — sometimes thousands — of dollars in penalties for early cancellation, cable providers do not make it easy to sever your ties with the company.
Unlike purchasing service, which can usually be done online without ever having to speak to anyone, cancelling can involve lengthy chats with desperate customer-retention employees. If you make it through that gauntlet, you’ll then have to return your TV equipment, which often means putting it in the mail or going to the local cable company office and waiting in line while holding several DVRs (that you’ve probably paid hundreds of dollars in leasing fees for but must return ASAP or face having to pay for in full).
Even when customers return their cable boxes, there’s always the chance that a mistake will be made and you’ll continue to charged for equipment you no longer possess, or charged the full price for equipment they claim you never returned. We’ve heard countless stories of this sort of buffoonery from customers of seemingly every cable and satellite provider, so there’s no reason to assume that once you hand over your cable box, that’s the last you’ll have to deal with your pay-TV carrier.
In fact, many cord-cutters aren’t fully cutting their connection to their cable company, as it’s often their internet service provider. Depending on their package and the discounts offered to customers who purchase bundles of services, there may be little to no savings in replacing their pay-TV subscription with a TV-streaming service if the cost of their internet service goes up.
5. Some People Just Don’t Want Live TV
The real danger for cable providers isn’t cord-cutting, but the coming generations of consumers that prefer to watch whatever they want wherever they want on whatever device they want. Yes, many pay-TV companies offer the ability to watch live-TV anywhere, but what about viewers who don’t really care about watching something live?
These are people who may be perfectly content watching shows on Netflix, Hulu, HBO Now, Amazon Prime, or any of the other growing array of subscription streaming libraries. They may not miss being able to watch the local evening news because they don’t understand why you would wait until 10 or 11 p.m. to watch a short, ad-interrupted recap of news that you already saw elsewhere because you were online most of the day.
It may be difficult for both cable companies and live-TV streaming services to convince these consumers to pay $20-$100/month for a bunch of channels they will probably never watch and limited on-demand content.
There’s no doubt that streaming is the future of video entertainment. Even the cable companies plan to (eventually, maybe) replace most cable boxes with apps that work on your TV and connected devices. The question that still needs to be answered is whether live TV is the future, or if coming generations will snicker at us for trying to shoehorn this decades-old “you’ll watch when we tell you to watch” format into technology that is intended to give the user the ultimate control over when and what they view.
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