Consumers are leaving the legacy pay-TV ecosystem in droves for TV streaming platforms such as Roku, which claims to have 36.9 million active accounts.
Roku predicts that within four years, half of all U.S. homes will have canceled their subscription to cable TV or will never have had cable TV, the company said Thursday in a letter to investors accompanying its fourth- quarter 2019 results.
This trend is boosting Roku’s business, says the company that sells software and hardware for consumers to stream internet video on their TVs. Roku describes itself as being a “neutral partner at the center of the streaming ecosystem,” CNBC reported.
In 2017, 73 percent of U.S. households had a cable or satellite TV subscription, according to the National Telecommunications and Information Administration.
There are no monthly fees for watching free channels or for using a Roku device. Roku streaming players that hook up to a TV start at $29.99. You still have to pay for subscription channels like Netflix.
By comparison, the average cable customer is paying about $160 a month for TV and satellite subscribers are paying $110. Some cable customers have internet included.
Here’s what cord-cutters don’t tell you, according to Alabama News Network:
You’ll probably pay more for the internet after you cut the cord. Cable internet companies usually give customers a discount when they bundle internet and TV. If you stop paying for TV, the price of your internet will probably go up.
If there are four people in different rooms all streaming Netflix on their different devices, things will slow down considerably once you cut the cord. You may need to buy WiFi extenders and upgrades for your Wi-Fi network.
Cord-cutters are often surprised that they cannot watch all of the channels they’re accustomed to getting on cable and satellite. Browsing is more difficult and using the remotes from streaming devices is not as easy as it is with cable or satellite. Channels are in alphabetical order or categorized by the type of programming — no channel numbers.
Still, just more than half of cord cutters — 52 percent — say they don’t miss cable or satellite TV. The ones that do, miss live events, local and national news, and sports, according to respondents in a NoCable.org survey.
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Companies that have a lot to lose or gain in the consumer shift to “over-the-top” internet streaming services are driving a wave of investment and competition in the media industry, CNBC reported.
For example, AT&T’s WarnerMedia is planning an additional service under the HBO brand name and Comcast’s NBCUniversal is launching a service called Peacock. Netflix,s Apple, and Disney are investing billions in new movies and shows for their services.
“New services and the growing investment in original programming that is exclusive to streaming are enriching the (over-the-top) experience,” Roku said in the letter to investors. “This is driving more viewers to spend more time streaming and less time in traditional pay TV.”
Roku’s reported revenue in the fourth quarter was up 49 percent to $411.2 million. Roku’s top 10 competitors include Apple, Google, Amazon, Microsoft, Samsung, LG Electronics, Skycatch, TiVo, TraceAir and Rackspace.