should you cut the cord on your cable company?
DESCRIPTION
With cable television billing rates on the rise is now finally the time to severe the cord and make the leap to a streaming internet content provider? Who are the major players, what do they offer, and why should you consider making this move now. Get the answers to these questions and more inside.TRANSCRIPT
Should You Cut the Cord on Your Cable Company?
Cable TV is getting pricey…
• In 2011 the average pay-TV package cost $86, including premium channels
• By 2020, that cost is forecast to rise as high as $200– Who can really afford to
pay that much?
Rising Costs
Source: NPD Group, https://www.npd.com/wps/portal/npd/us/news/press-releases/pr_120410/
Cable TV is getting pricey…
• Cable channel owners keep charging pay-TV companies more to carry their content
• Pay-TV operators like Comcast, DirecTV, and Time Warner Cable pass that cost on to you!
The model’s broken!
The alternatives
• There are three big streaming video services today– Netflix– Amazon Instant
Video/Prime Instant Video
– Hulu/Hulu Plus
But you have a choice!
The alternatives
• Netflix: $7.99/month– Or $11.99/month if your family
wants to watch more than two things at once
• Amazon: $79/year for Prime membership ($39/year for college students)– Pay-per-view for content not
available on Prime• Hulu: some content is free;
Hulu Plus is $7.99/month
What you’ll pay
The alternatives
• Each has different strengths– Netflix: pay one price, large
content library, original series– Amazon: pay-per-view and
subscription offerings, large and growing content library, other perks
– Hulu/Hulu Plus: free and subscription offerings, current TV shows
They’re not the same!
Let’s take a look…
Netflix
• Got its start mailing DVDs to customers’ homes
• Created streaming video service in 2007
• Started offering standalone streaming service in late 2010
The streaming leader
Netflix
• More than 30 million U.S. subscribers
• More than 40 million global subscribers
The streaming leader
Source: Netflix Q3 2013 shareholder letter
Netflix
• TV Shows– Breaking Bad– Family Guy– How I Met Your Mother– The Walking Dead– Grey’s Anatomy– Law & Order: SVU
• Netflix also has a large collection of movies
Top syndicated content
Source: CNET, http://crave.cnet.co.uk/homecinema/breaking-bad-is-top-netflix-us-show-doctor-who-in-top-10-50012754/
Netflix
• House of Cards• Orange is the New Black• Arrested Development
(4th season)• Lilyhammer• Hemlock Grove• Marco Polo
Netflix is also investing heavily in original content
Amazon.com
• Amazon Instant Video: more than 150,000 titles available to buy or rent
• Prime Instant Video: more than 40,000 titles included with Prime membership– Prime members also get free
2-day shipping on most Amazon purchases
2 services
Let’s focus on Prime Instant Video
Prime Instant Video
• “Tens of millions of members worldwide”– Amazon has never given firm
Prime membership numbers• More than 1 million new sign-
ups in the 3rd week of December– But many members don’t use
Prime Instant Video
Growing member base
Source: Amazon.com Dec. 26 press release, http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1886961&highlight=
Prime Instant Video
• TV Shows– Downton Abbey– Under the Dome– Falling Skies– SpongeBob SquarePants– Dora the Explorer
• Also includes a good selection of movies
Top Prime content
Prime Instant Video
• Alpha House• Betas• Tumbleaf
Amazon is also testing original content
Hulu/Hulu Plus
• Hulu is a joint venture of three big media companies– Comcast– 21st Century Fox– Disney
• Hulu officially launched in 2008
Old media meets the 21st century
Hulu/Hulu Plus
• Hulu is a free, ad-supported service– Primarily offers recent episodes of
TV shows• Hulu Plus also has ads, but has 2
main advantages:– You can watch older episodes for
many shows– Supports viewing on your TV
through connected devices (for most shows)
Two models
Hulu Plus now has more than 5 million members
Hulu/Hulu Plus
• More than 86,000 episodes across 2,900 TV series– Most top content comes
from Hulu’s 3 owners• Not so good for
movies…
Great for TV
Source: Hulu blog, http://blog.hulu.com/2013/12/18/a-strong-2013/
Hulu/Hulu Plus
• 7 of the top 10 primetime shows– Modern Family– The Voice– The Blacklist– Agents of S.H.I.E.L.D.– Scandal– Grey’s Anatomy– Sleepy Hollow
Top shows
Hulu/Hulu Plus
• Hulu is also trying original content– The Awesomes– Behind the Mask– The Wrong Mans
Original content
Which is right for you?
• Netflix: best original content; popular exclusives; user-friendly interface– Limited new release movie/current season
TV content• Prime Instant Video: popular exclusives;
integration with pay-per-view service; lowest price– Limited new release movie/current season
TV content; fewer originals• Hulu Plus: lots of current season TV shows
– No way to avoid ads; few movies; some shows can only be watched on a computer
Strengths and weaknesses
The Motley Fool’s Top Stock for 2014