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Streaming Services Begin to Beat Cable Subscriptions in 'The Battle for the Couch Potato


"cord cutters"

Due to improved and increasing streaming services provided by companies Hulu, Netflix and others, millions of Americans are "cutting the cord," if you will, from cable companies.

A recent report from Convergence Consulting Group found between 2008 and 2011, more than 2.86 million people canceled cable subscriptions in favor of online streaming. The report -- The Battle for the North American (US/Canada) Couch Potato: Online and Traditional TV, and Movie Distribution -- in its sixth year now, shows that compared the previous year, 2011 saw 50 percent fewer customers signed on for cable services.

Not only that, but the report states broadcast and cable networks are making the online full-episode TV they do offer "less free" by increasing ad time, and/or reducing available shows for free.

Although the report forecasts "cord cutters" will reach about 3.58 million before the end of 2012, it does project that cable subscriptions will be up next year to 185,000 new subscribers (112,000 subscribers were reported for 2011 and 272,000 in 2010).

Yahoo! News reports Convergence co-founder Brahm Eiley speculating that increased prices for streaming services will be a factor in this small rebound for cable and broadcast companies. The issue is that sites such as Netflix need to keep up with the cost of streaming rights in order to provide content to their users. Yahoo! reports Netflix owing $1.1 billion for streaming rights in 2010, whereas the number jumped dramatically to $3.9 billion in 2011.

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