When people are begging -- literally begging -- to buy your product, what's a company to do?
But as its hit fantasy series Game of Thrones continues to reign supreme with downloaders, the old argument about whether or not it should offer its streaming service, HBO Go, as a standalone product, or let non-subscribers buy episodes a la cart, has a new twist: the increase in both digital viewing and the number of people considering abandoning pay TV proves that the previously assumed negligible audience of digerati cord cutters can't be so easily dismissed anymore. Right now, 30 percent of U.S. subscribers would consider dropping their plans and getting their TV fix via streaming services like Netflix and Hulu.
There are tremendous programs now on premium pay TV, no doubt, beyond Game of Thrones and other HBO hits. Showtime's Dexter, Homeland and Shameless are fantastic, for example. And shows that are funded indirectly from the current model, like AMC's Mad Men, Walking Dead and Breaking Bad, are as good as anything on a premium channel. But the argument that this type of quality programming can only exist with funding from the cable system is getting weaker and weaker, as the field of online content creators and distributors get more sophisticated and more crowded. Netflix in particular is on a tear, with its successful and buzz-generating House of Cards and the eagerly anticipated Arrested Development episodes set to air next month.
The combination of cheaper and more widespread broadband and increased mobile usage is turning us all into independent viewers. It's predicted that over 50 percent of U.S. Internet users will be watching television online by 2014. Right now, 5 million people say they've ditched pay TV in favor of Internet streaming. If cable and satellite providers laugh off that relatively small number, they've missed the more important part: that number was only two million in 2007.
Can pay TV dig its heels in and try to hold off the future? Just ask someone in the record industry how that strategy worked out.
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