Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=231291
Story Retrieval Date: 11/1/2014 8:13:41 AM CST
IPSOS/Aimee Keane, Medill
While cable television providers worry about current subscribers threatening to “cut the cord” on service, the real threat to their business might be those who have never signed up.
Many young Americans setting up their first homes or apartments are opting out of cable packages not only to save money, but because their television programming can be accessed online, either through streaming or torrent sites.
Nick Ferreira, a 29-year-old librarian in Chicago, is among this group of cost-conscious consumers.
“The last time I had cable was when I was still living with my parents six years ago,” Ferreira said. “Ever since having to pay rent it just didn’t make sense financially.”
NPD Group, a market research company, estimated the average American cable bill in 2011 was close to $86. But for just a few dollars each month, many Americans are turning to streaming subscription services for their regular entertainment. According to a Harris Interactive poll, of those Americans who do pay for cable TV content, 43 percent aged 18 to 36 subscribe to Netflix. This is compared to just 31 percent of those aged 37-48.
Ferreira said he uses web-streaming sites like Hulu and Netflix, subscriptions for which run close to $8 per month. He still has access to his parents’ cable plan, but looks beyond the tube for entertainment.
“I take advantage of the vast collection of movies and television series available at the public library,” he said.
And although experts like research firm SNL Kagan say the television industry is rebounding from a recession sales drought, an uptick in advertising sales does not indicate an increase in viewers across all age groups. A February 2014 IPSOS survey reported 89 percent of Americans aged 50 to 54 watch programming live on television, but only 72 percent among the 18 to 34 group.
But for consumers like Ferreira, the Federal Communication Commission’s threat of upending network neutrality could challenge the free-flowing content on the Internet. The agency is considering creating a two-tiered system, providing two lanes of different speeds. Companies willing and able to pay higher prices will gain access to faster lanes.
As a customer of big content carriers like Comcast Xfinity for Internet and Netflix for web streaming, Ferreira could be forced into paying for the faster stream. He said that, out of principle, he doesn’t support that notion.
“The Internet was created with the hopes that information would flow freely.” He said.