The evolution to nonstop streaming
When you sit down to watch a show after a long day, do you turn on your cable box? Or do you use a streaming service like YouTube TV or Netflix? Most of us can remember a time when cable TV was the norm. Families would make sure they were home and had the TV fired up and ready at exactly the moment when their favorite show’s opening sequence started rolling. And if there were two shows on at the same time, there would be constant flipping back and forth on commercial breaks.
Today it’s rare for most of us to watch live television — with a few notable exceptions, including sporting events, Game of Thrones, and The Bachelor. We have the option to record, pause, skip commercials, and watch on our own time. The way we watch TV is unrecognizable compared to even a few years ago.
1950s
Community antenna television (CATV) was developed to bring television channels to small communities that didn’t have local stations. The system wasn’t perfect, and interference was a big problem, but people would pay top dollar to have these TV cables installed — $125 for the initial hook-up and a $3 monthly charge.
1960s
By 1961 there were about 700 cable television systems in the US. At the beginning of the decade, broadcasters were excited about CATV systems because of the large audience and higher advertising rates, but that attitude quickly changed. Cable television began to grow, and in doing so it expanded to provide channels that were already being shown on local networks. Soon, the 12 channels everyone was accustomed to were surpassed.
1970s
Cable steadily grew in popularity, but still only 8% of US households had it. Many wondered if cable had the potential to expand to urban areas. The real uptick in growth came with the start of Home Box Office (HBO) in 1975, which used a satellite named Satcom I to produce a new service for cable subscribers which fixed many interference issues. HBO launched with a premium showing of a boxing match between Muhammad Ali and Joe Frazier. They later introduced commercial-free movies that couldn’t be shown on regular television. Cable TV finally offered its subscribers something worth paying for.
1980s
From 1975 to 1987 the cable industry boomed. The number of systems tripled and the percentage of households with cable jumped to 50%. In 1983, HBO released its first film specifically made for cable — The Terry Fox Story. This marked the beginning of the move toward “original content” that we see today in many streaming services. In addition, the 1984 Cable Act helped cable continue its growth by deregulating certain rules. By the end of the decade, the cable industry had spent over $15 million on wiring American houses alone. Cable programming became eligible for Emmy awards, and CNN began its 24-hour news coverage (which many predicted would quickly fail).
1990s
In 1992 Congress approved the Cable Television Consumer Protection and Competition Act, which made local broadcasters choose if they would allow cable companies to run their programming or demand compensation. Many local channels shut down because of disagreement. After the implementation of local networks, cable subscribers had about 171 cable networks to choose from, and many local channels.
By the end of the decade, hybrid cables were being developed that offered “broadband” networks of cable TV, video, voice calling, high-speed internet, and many other digital video services that could all be brought into the house through a single cable. This brought a boom of businesses looking to get into the market, including AT&T, Microsoft, and AOL Time Warner. Broadband services were still in their infancy, but lots of investment and energy was going into developing a competitive market. At the same time, quietly and unassumingly, Netflix launched in 1997 as a DVD delivery service with 925 rentals.
2000s
By 2002, broadband cable and communication services were found in two-thirds of US households, and by the end of that same year, “plug-and-play” systems made cable set-up easy and cheap.
The new millennium brought many new services, including on-demand and digital recording options that allowed us to watch shows on our time. This quickly became the norm. In 2005 Netflix began offering its own on-demand service, which allowed users to watch movies and TV shows at their homes whenever they liked. At the same time, internet speeds and faster LTE helped consumers watch anywhere on their mobile devices.
2010s
As quickly as cable became the norm, it just as quickly phased out. Americans began moving away from cable and satellite to online streaming services like Netflix, Hulu, Amazon Prime, Apple TV, and Roku. Although cable TV still exists in the majority of American homes, younger home owners are choosing to ditch the cable in favor of these online options. While 86% of 15- to 24-year-olds watch internet videos, only 40% of those who are 65 or older do so. Why is this? It’s mostly a matter of preference, but cost and relevance are also issues. Online video options are vast, and much of it is free and easily accessible. Some of the highest subscribing YouTube channels are geared toward kids, which gives millennials who have children yet another reason to prefer streaming services over cable.
According to a study done by Deloitte, mobile devices are driving the rise of digital consumption. The internet is accessible to anyone with a mobile phone, which makes scrolling through hours of YouTube videos in bed or binging a Netflix show on a tablet an extremely easy and almost mindless thing to do. Many companies are eager to throw their hats in the video subscription ring, including Disney, which released Disney+ at the end of 2019. In addition to featuring TV and movie content that drew from the wide array of past successes put forth by Disney, Pixar, Marvel, Star Wars, and National Geographic, Disney+ also released an original Star Wars show that was a huge hit for the Disney franchise.
2020 and beyond
We predict that the fall of cable TV will continue. According to eMarketer, 25% of US households will drop cable TV by 2022. This will be replaced by more streaming services. Some streaming services, like Hulu and YouTube offer live TV options in addition to their on-demand content. This will continue to expand to allow more variety. Services and networks will create packages of shows in an effort to appeal to more viewers, not unlike the three-in-one discounted packages offered by Disney+ in partnership with Hulu (now owned by Disney) and ESPN+.
It’s incredible that only 70 years ago, the way we interacted with TV was only in its infancy. Things have evolved rapidly, leaving us in a place where most of us don’t go a single day without streaming some sort of video — they’re embedded in nearly every website, they’re what we talk about in the office, and they’re a way we unwind after a long day. It will be fascinating to see more original content put out by different services and continue to watch as the landscape shifts.
