Cable TV subscribers in the USA are record breakers but not in a good way: their bills regularly set new record highs.
According to the Leichtman Research Group, bills rose 39% from 2011 to 2015, almost eight times the rate of inflation. The average total monthly bill for cable TV increased another 4% in 2016 to reach $103.10. This is a uniquely American problem: cable subscribers continue to pay content providers high prices to get the channels that they want. Premium pay-TV packages in the rest of the world vary from around $34 in Germany, around $45 in France and Italy, heading up to $80 in the UK. The rest of the world is getting content for a fraction of the price paid in the USA.
So, the increasing number of cord-cutters in the USA is not surprising. However, there is evidence that a great number of people have both an OTT as well as a pay-TV service. The concern is that with a growing number of different places - whether traditional pay-TV or new contract-free OTT services - offering gated, exclusive access to their own TV shows, how many people can sign up to multiple OTT as well as a host of pay-TV subscriptions?
This is driving an increasing number of cord cutters (and people keeping their pay-TV subscription) to take the piracy route. Torrenting shows from illegitimate sites requires a level of technical confidence, but there are many simple content streaming apps for jailbroken devices, or which slip through the net of app store rules. These apps make it easy and give a sense of legitimacy to the mass of users who would never dream of breaking the law by stealing a movie from a store, but don’t give a second thought to watching theater releases at home using these questionable apps.
The video industry has an example to follow in the music industry, where - before iTunes - piracy was rife. iTunes solved piracy for many people as they don’t mind paying $1 to download a song legally. Let’s be clear, iTunes hasn’t solved all piracy, but it has provided a legal means of downloading music at a price that many people are willing to pay.
The video industry is stuck thinking ‘that will never happen to us’ but piracy in video will lead to exactly the same result as happened in music. There is a pent-up demand for an ‘iTunes for video’ that provides what the content consumers want, at a price they’re willing to pay, and doesn’t require them to sign up to multiple pay-TV and OTT services.
The time is coming for content owners to break out of the old business models.
SotalCloud is offering content owners an OTT free trial: launch your brand and content within 48 hours.
Get your service up and running in a few steps and take advantage of our ‘pay-as-you-grow’ approach to monetize your content for any device.
Russell Foy, CEO of SotalCloud