ByBen Sibley, writer at
Avid film fan and film-maker. Love cinematography and great storytelling.
Ben Sibley

The television industry is undergoing a transformation of epic proportions. A change is occurring in the way individuals interact with visual media. This shift is not a deviation of content but rather a change in platform. From 1950 to 1960 the number of television sets in US households increased a staggering 81% and families used TV time as a bonding mechanism. Today, this trend is quickly reversing to a more specific and individual experience. Millennial’s especially are forgoing their subscriptions to big cable companies in favor of less expensive more user-friendly options. This practice is often referred to as “cord cutting” and it’s having enormous effects on the television industry.

One prime example of the cord-cutting phenomenon is the online subscription company Netflix, which provides on-demand content globally. Founded in 1997 as a DVD delivery service, Netflix has transformed itself to the premiere online provider of television. Currently, 40% of Americans subscribe to video streaming services, and Netflix leads the pack. The popularity of Netflix has seen exponential growth both overall and yearly. In 2011, Netflix had nearly 23 million subscribers; as of quarter three in 2015 it has almost 70 million. Costing just 7.99 a month, with no advertisements and customer friendly interface it’s easy to understand why. Netflix is an interesting case study that reflects the larger online-streaming industry whose major players also include Amazon and Hulu.

It is no coincidence that online streaming has coincided with a decline in live television viewership. In the last year, the number of “broadband only” households has increased 39% and “viewing of online video increased by about 4 hours per month year-over-year to 10 hours and 42 minutes.” Meanwhile, Nielsen finds 2014 saw a “significantly more precipitous decline in TV viewing than any previous year…” with viewers watching 12 fewer minutes of TV per day. It’s becoming clear streaming companies pose a major threat to the live TV industry. Consumers are beginning to see them as alternatives to live content rather than mere additions.

To combat this, the major players in live TV are creating their own online platforms. HBO, Sony, and Dish are just a few of the many companies offering online alternatives for current viewers. The hope is even if people stop watching live TV they will still consume the same content. The transition from box TV to online promises the “unbundling” of TV packages, placing greater emphasis on content.


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