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Will On Demand Services Defeat Traditional TV?

on demand economy

By the 1990s, nearly every household in the country had a television set. Today, nearly every person in the country has a means of streaming video from the internet, and it’s leaving traditional TV users to question whether their monthly subscriptions are worth the cost, or if they should begin to go elsewhere to satisfy their in-home entertainment needs.

The 21st-century has seen a lot of changes in the world of digital, but is that really a threat to traditional TV? Many people think that the end to cable and satellite will be coming in the next few years, but researchers have estimated otherwise.

While typically viewed as two separate sources for movies and television, on-demand services (like Hulu) have long been trying to steal the spotlight from traditional TV providers, and in some ways, they’ve succeeded. Netflix and Hulu offer something that traditional TV hasn’t (or didn’t): on-demand television and movies.

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In today’s world where everyone wants instant answers and instant results, there was obviously a need for instant-streaming as well. As soon as the opportunity to instantly stream your favorite shows and movies popped up, millions rushed to the market, but it wasn’t what everyone hoped. Hidden behind the convenience of instant streaming was the fact that the selection was rather small and very outdated. Since services like Netflix were huge competitors against traditional TV, very few networks would sign over the rights to their shows and movies.

Overtime though, Netflix and similar services persevered, and today nearly fifty-percent of all American households are subscribed to Hulu, Netflix, or another online streaming service. The market share is enormous and growing by the day, but the original issue is still present: the selection of these services – while growing – simply isn’t comparable to that of traditional TV.

With so little variety, why would so many Americans say they want to switch? Because the selection of traditional TV comes with one downside: cost. But, even with our frugal society, only 22% of those who say they will drop their cable (or satellite) actually do. This number makes it clear to the industry: selection wins, even if it comes at a slightly more expensive cost.

While some of those who have promised to drop traditional TV have followed through, the market is still devoted to the hundreds of channels and 24/7 always-on availability that traditional TV provides. In fact, researchers found that most of the 47% of American households that are subscribed to on-demand streaming services are also subscribed to traditional TV. This makes one thing clear: people want both the selection of traditional TV and the availability of instant streaming. While the cost of both can quickly rack up, if you choose your services wisely, you’ll be able to have the convenience of movies and shows that can be instantly streamed online, and the wide selection of shows and movies that are always playing thanks to your cable or satellite provider.

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Together, on-demand streaming and traditional television satisfies the needs of any household, and many traditional TV providers have already realized the opportunity. Dish and other TV companies have begun offering their own on-demand streaming services that allow subscribers to instantly watch re-runs and the latest episodes of their favorite shows (and, in some cases, movies). This opens up a new door for traditional TV users, as it gives them the convenience of on-demand and the selection their cable/satellite subscription already provides (plus, most companies aren’t charging extra). But with this option, why are so many Americans joining up with other on-demand services?

The battle between on-demand and traditional TV companies has been raging for a few years now, and it’s now seemed to have reached its peak. With many traditional TV providers offering their own on-demand services, and even some networks selling online subscriptions to their channel (like HBO), why do Netflix and Hulu stand a chance? Researchers have three answers: commercials, cost, and originals.

While some services, such as Hulu, are sticking with the traditional television setup with short advertisement breaks, others (like Netflix) are keeping their platforms 100% commercial-free. Obviously, there’s really nothing to dislike about watching TV shows and movies uninterrupted. Along with commercial-free or minimum-commercial viewing comes an affordable price. Most of these services start at just $10 a month. But, users have to remember that this cost also means less selection, unless you count the original productions that are starting to spring up.

Hulu originals, Netflix originals, and even Amazon originals, on-demand platforms found an interesting way to fill the selection gap: original series. And many of them have been rather successful. Researchers say that aside from the factors of cost and less commercials, many subscribers are choosing to sign-up for these services due to the original series that can only watched by users, and it’s proving lucrative for the companies.

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While nearly half of American households are signed on to on-demand services, over 80% of all American households are also users of a traditional TV service, leaving researchers to conclude with one solution: traditional and on-demand TV services should be combined for the most customer satisfaction and the best results.

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