More viewers tuning out pay TV

With the launch of devices like AppleTV, Roku, Google’s Chromecast and Amazon Fire TV, experts say, the number of pay-TV defectors likely will rise in the months and years ahead.
With the launch of devices like AppleTV, Roku, Google’s Chromecast and Amazon Fire TV, experts say, the number of pay-TV defectors likely will rise in the months and years ahead. The Wichita Eagle

About two and a half years ago, Gordon Murray and his wife, Anna, were flipping through the channels on their cable-equipped television and decided something.

“It didn’t seem like we were getting $110 or $120 worth of value out of what we were paying for it every month,” said Murray, who lives in southeast Wichita. “So we did a little looking around.”

He bought a $60 over-the-air TV antenna and a $100 Roku box, which streams video to television via an Internet connection. He dropped cable.

Now, with subscriptions to Netflix and Amazon Prime – as well as the occasional pay-per-episode splurge, including a New Year’s Eve “Dr. Who” marathon – the Murrays’ television habit costs them about $20 a month.

“It was mostly a bang-for-your-buck decision,” he said.

The Murrays are part of an estimated 7.6 million American households that have left traditional cable or satellite television behind.

According to a May 2014 study by Experian Marketing Services, the number of pay-TV defectors is steadily rising. About 6.5 percent of households nationwide have cut the cable cord, up from 4.5 percent in 2010.

Households in the Wichita area reflect national trends.

According to Nielsen Scarborough research, about 52 percent of adults in the Wichita television market – a vast area that includes more than 900,000 adults in 65 counties – said their household subscribes to cable.

Thirty percent said they subscribe to satellite television, and those were almost evenly split between Dish Network and DIRECTV, according to the research conducted between August 2013 and July 2014.

Nearly one in five households – 18.5 percent – said they did not subscribe to either cable or satellite television, Nielsen Scarborough says.

Experts say the launch of devices like AppleTV, Roku, Google’s Chromecast and the Amazon Fire TV mean those numbers likely will rise in the months and years ahead.

Germaine Halegoua, an assistant professor in the University of Kansas Department of Film and Media Studies, tracks trends in television viewing habits and says the landscape is changing quickly.

When she addresses students in her television studies class for the first time – as she will when KU students return for a new semester this week – Halegoua asks them to define the word “television.” They always make clear that “it isn’t that box in the corner of your living room,” she said.

“It’s about content more than anything else,” she said.

“More and more, people – particularly younger people – see television as this sharing of cultural knowledge or capital. … If they’ve heard of something, they want to find it right away, and they find ways to do that, whether it’s online or through subscription services.

“I think it’s pretty safe to say that going cable-free or cutting the cord or never signing up for cable is becoming more common.”

Cable changing

Traditional cable is by far still the dominant player in the Wichita-area television market, though its share began to diminish as competitors such as AT&T Uverse, Dish Network and DIRECTV entered the scene.

According to the most recent Nielsen Scarborough data, about 35 percent of adults in the Wichita market – which includes Hutchinson and surrounding areas – said Cox Communications is their cable provider.

“Cable is not outdated by any means, nor is broadcast television outdated,” said Bonnie Tharp, owner of Copp Media Services in Wichita.

“Over-the-air television is still a mass media, and people are still getting most of their information, most of their programming, most of their entertainment from the traditional mediums.”

A recent contract dispute between Cox and KAKE-TV highlighted the tenuous relationship between cable providers and television stations. For a few days, it sent some customers scrambling for alternative ways to watch their favorite ABC shows.

Dennis Clary, spokesman for Cox, said the dispute had to do with “keeping costs as minimal as possible so our customers don’t have to feel the burden.”

Cox recognizes that today’s viewer has more choices than ever, he said, so the company is evolving to meet customer demands.

Its new “TV Economy” package, at about $39 a month, is a less expensive option designed for people who might want to supplement basic cable with services such as Netflix or Hulu Plus.

Other services such as Flex Watch TV include HBO, HBO On Demand and HBO GO and allow customers to watch programs on TV, online or on mobile devices.

“Our goal ultimately is to give customers the content they want on the platforms they choose,” Clary said. “We think people are really, at this point, getting more value from cable than maybe they understand.”

Cost of TV

Talk to people who have ditched cable, and it’s clear that cost is a primary factor.

Steve Maack, a Wichita high school teacher whose youngest child started college last fall, dropped his cable subscription this month after “talking about it for quite a while.”

A soccer and baseball fan, Maack thought about dropping it last summer, but then he got caught up in World Cup soccer matches. When the Kansas City Royals made their World Series run in the fall, he postponed the cord-cutting again.

“We’re not really big TV watchers except me, for sports,” Maack said. “But it’s just so expensive. … It’s just going to require a lifestyle change as far as the Royals and no Premier League soccer for me.”

He says he plans to listen to baseball on the radio, which he enjoys anyway, and go out to local sports bars to catch the occasional soccer match or Wichita State University basketball game.

Although cutting cable can translate to big savings, experts caution that the cost of streaming subscriptions, on-demand content and a la carte programming can add up quickly.

Earlier this month Dish announced its long-awaited Sling TV, an Internet-based service that will cost consumers $20 a month for live access to ESPN, ESPN2, CNN, Food Network, TNT, TBS, Disney Channel and more.

Clary, the Cox spokesman, calls it “Frankenbundling.”

“When you start to aggregate those costs, it’s often in the same ballpark as a bundle or package” that you could get from a cable provider, he said. “With Cox, you’re going to get one provider, one bill, our reliability that we tout so often.”

Halegoua, the KU professor, says the big television debate used to be: Who’s going to win the viewer wars? Folks who create content, or companies that hold the reins on distribution?

“A lot of people are saying that was just a ridiculous dichotomy,” she said. “It’s going to be somebody who has a hand in both.”

‘Lots to watch’

For Murray and his wife, living without cable has not meant living without television.

They watch some programs live when they can, such as CBS’s “Big Bang Theory” and “Marvel’s Agent Carter” on ABC, using their digital antenna. Gordon Murray said he does miss the ability to rewind programming or zip through commercials.

“That’s an easy thing to get used to when you have cable and a DVR, but you can’t pause live TV,” he said.

And a few times, they have streamed so much programming online in one month that they hit their broadband limit and had to pay a nominal surcharge.

“I don’t feel like we don’t get to see anything,” Gordon Murray said. “It really comes down to: When we want to watch something, is there something to watch? The answer is yes.

“There’s lots to watch, and we’re spending less money.”

Reach Suzanne Perez Tobias at 316-268-6567 or stobias@wichitaeagle.com. Follow her on Twitter: @suzannetobias.

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