Cable television has co-existed with over-the-top (OTT) services for over a decade now, and we still haven’t seen the cord cutting “apocalypse” that experts have been predicting. In fact, many consumers today seem content having both types of services side by side. OTT content and cable television complement each other nicely.
Now, though, some OTT providers like Google/ Alphabet (YouTube) and Hulu are embracing new strategies that will put them on a direct collision course with cable TV operators.
Just recently, Google/ Alphabet announced its upcoming YouTubeTV service, which is being described as a “cable killer.” YouTubeTV — which will soon launch in the U.S. — will provide live and on-demand streaming TV for customers. The service will cost just $35 for a family plan of up to six accounts, and customers will be able to access up to 40 different networks in addition to original YouTube content and YouTube Red. Customers will be able to use YouTube TV to access major channels like ESPN, FX, USA, Fox Sports and NBC Sports. Additional channels will also be available but for an extra charge.
According to CNBC, YouTubeTV will let people stream — and even record — content from any device. It will also make it possible to stream content from a phone to a TV using Chromecast, for added convenience. And consumers will eventually be able to use Google Cast and Home for voice-activated TV browsing.
Hulu’s live TV service, for that matter, will start at $39.99 per month. It will feature a revamped live TV interface that will also be optimized for mobile. This interface will provide real-time programming alerts and the ability to access an on-demand library alongside streaming TV.
Oh yeah, there’s one more thing you will find with Hulu’s upcoming TV service: A 24/7 customer support center that will offer email, social media and live chat support. This announcement is further evidence that Hulu is transitioning into a virtual cable operator.
So, will this new type of enhanced OTT and streaming TV service be a death knell for cable operators?
It’s all in how you look at it.
While these services will likely generate cord cutting spikes, they will also fuel broadband subscriber growth. According to a recent study from S&P Global Market Intelligence, basic video subscriptions will drop by an annual CAGR of 1.5 percent to 45.4 million by 2026, while total revenues generated from residential video services will fall at a CAGR of -0.5 percent (or $55 billion annually). However, broadband subscriptions will surge by more than 8 million by 2026, to at least 71 million.
“Like many industries, cable isn’t immune to shifting preferences, but continued growth in broadband may propel revenue growth on both the residential and commercial end,” stated Tony Lenoir and Ian Olgeirson, researchers at SNL Kagan. “Despite ongoing declines in video, the next 10 years look pretty good for this sector.”
We want to know: How do you think these new types of services will impact the cable industry?