It has been a little over a year since we cancelled our cable service and began to watch all of our TV online. I still get looks of shock and confusion when I tell people this. Yes, it is true. We turned off cable. I still watch movies and shows whenever I want to, but now there is one major difference. I can always find something that I actually want to watch. How many people can say this about their cable?
But I question whether or not it is sustainable. The business model simply does not seem sound. But before I get too terribly into any sort of industry analysis, let me outline how I watch TV.
This was done on the cheap. We were paying about $70 for our cable which included a rented DVR and a few movie channels. One of the things that has always irked me is that even though I was paying for cable, I still had to watch commercials. So my goal with the new system was to eliminate commercials completely. I have been about 90% successful with this.
Our house is small, and we find ourselves watching TV in only two places. The vast majority of TV is watched in the living room, and the wife and I occasionally watch TV in our bedroom. The bedroom was very simple. We have a computer in there with a 20 inch screen that is easily visible from the bed. We simply watch TV on that. The computer was originally designed to take a cable signal and function as a DVR so it even has a remote control that we can use.
The living room was a bit more of an ordeal. We do not have an HDTV. Yes, you heard that right. We watch internet TV on a conventional TV screen. Truth be told, that TV is about eight years old. It has an S-Video cable and we never have had much trouble hooking various computers up to it. I used to have a dedicated computer hooked up to the TV in the living room with a wired LAN connection, but it failed not long after it was put into service. It was an old Pentium 4 that I had frankensteined together from the body parts of other computers. The motherboard decided it was time to die, and I was never able to fix it. Luckily I had a laptop that also had an s-video connection. We simply booted up the laptop, configured the show we wanted to watch, attached it to the TV configuring it as screen 2, and watched our show. Recently, the Wii finally came out with software allowing us to watch Netflix through that system. This has made things quite a bit easier.
How do we get content? Mostly we just watch Netflix. It amazes me how many people pay for Netflix every month and are still not aware of the ‘watch it instantly’ feature. We were paying for Netflix long before we cut the cord with the cable company. So there was no added expense when we cancelled cable. Netflix has sort of become our favorite TV channel, with a few differences from normal cable viewing. Almost every month they provide new content for their ‘watch instantly’ service. We are usually interested in 5 to 10 of the movies, and two or three of the TV shows that are made available. This isn’t counting the content in which my daughter is interested. This month Netflix put up the entire ‘Backyardigans’ collection so she will be good until she is goes to college. This selection satisfies about 90% of our needs. Whenever the wife and I get to a point where we have time to sit down and watch a show the conversation turns to the new shows available on Netflix. Our tastes are very similar so a consensus is reached fairly quickly, and we bring it up and watch it.
The best way to describe this to someone who is still tied to cable is to tell them that this is very similar to something like ‘HBO on Demand.’ However, our selection is bigger and all the content is on demand. We still get DVDs in the mail, but we feel a bit guilty about this. We pay about $16.99 a month to Netflix, and this allows us to have three DVDs in rotation. To be honest, these DVDs languish on top of our TV, sometimes ignored for weeks at a time. It is not uncommon to mail them back unwatched out of guilt thinking that someone else is waiting for that title to become available. Netflix has a cheaper plan at $8.99 that lets you have only one DVD at a time. We considered downgrading our plan, but we never have done it out of guilt. We enjoy the service so much that it seemed insane to actually lower our monthly payment just when we started to use the service more than ever. So, to support a company we like so much we actually pay more than we have to. Being honest hurts sometimes.
So what happens the other 10% of the time that we aren’t watching Netflix? Well, the internet is a wide open space full of interesting things to watch. Hulu is a good service with a lot of free content. Every major network has a website that has several full episodes of many of their shows. Currently you can go to NBC.com and watch everything from new episodes of ‘30 Rock’ to old episodes of ‘Magnum P.I.’ They used to have the complete ‘Star Trek TOS’ catalog available, but I see that they have taken it down. I have also found a couple of shady places on the internet where you can view brand new BBC content without commercials only hours after it is originally broadcast in the U.K. So I can get my Dr. Who fix without having to wait for it to come out on DVD.
In other words, there is always something to watch, and I will never pay for cable again. Many people argue with me and say, “I couldn’t ever do without show X.” When they tell me this I can usually go to Google and find a way to watch it online within two or three minutes of searching. Full disclosure here though: I am not a sports fan and I never will be. If I was though, I might be tempted to keep cable. I haven’t found a good way to watch live sports on the internet. Although to be honest, I have never tried. But I hear it is pretty much impossible.
What about quality? Online content is not DVD quality, but it is just fine for the casual watcher. If I wanted to spend the money I could get a better TV and increase the resolution, but the reader should remember that I make my living as a paramedic. This will not happen soon.
The result of this break with the norm is that I watch what I want to watch when I want to watch it for very little money. And my daughter has grown up commercial free which has implications that go far beyond the boundaries of this small blog post.
But I do worry about the sustainability of this. Take the entry level Netflix plan at $8.99. Think of it, unlimited streaming and DVD’s mailed to your house for $8.99. If you watched a movie every 3 or 4 days, you could easily burn up $8.99 in postage over the course of a month. Ignoring that though, let’s say you just watched streaming almost daily for a month. That kind of bandwidth and hard drive space could easily eat up the price of admission. And if there was anything left, perhaps a dollar or two, is this enough to sustain the authors and distributors of this content? Let’s say that I watch a mixture of ‘Dr. Who’ and ‘Buffy the Vampire Slayer’ for 30 days. Does the BBC and FOX get to split the dollar or two left from my monthly fee? It is important to remember that Netflix has no commercials. At least Hulu has that going for it. But can Netflix really take less than $9 from me, mail stuff to my house, provide me with gigabytes worth of bandwidth, pay the licensing fees to content providers, and still make a profit?
Of course not. They most likely went into the red on the postage and the bandwidth alone. Now you may understand why we haven’t lowered our plan from the original $16.99 a month. We just couldn’t do it in good conscience. But what is their plan? This is obviously one of those Web 2.0 ventures in which a company with a good idea has unlimited backing from hopeful investors while they try and build an audience while losing money. I have always wondered how the Twitters, Youtubes, and Netfix of the world kept their doors open.
From this perspective, there are only two ways out. Either the rent will be raised or commercials will be introduced. Make no mistake. This will happen at some point. Netflix will continue to offer this service at a loss until their customers are addicted to it like crack. At which point they will make a move to make some money. Will it be successful? Or will it fail? Hulu and Youtube have already made their moves to monetize their operations.
I have a secret though. I am not sure Netflix needs to know this, but I am going to say it anyway because the way I consume media is at stake here. Hulu made a mistake because they have commercials. Youtube made a mistake because they have commercials and that stupid annoying bar at the bottom of the screen. Netflix is the only major service left standing that is commercial free, and that is why I have thrown my lot in with them. So, I will say this only once. And Netflix, I suggest you listen closely because I won’t say it again. Psssst…Netflix…if you raised my rent to $40 a month and all I got was commercial free streaming I would pay it. There. I said it.
But it has to be commercial free. I am tried of people trying to sell me something. I am tired of trying to explain to my daughter that she doesn’t need some unimaginative plastic piece of crap. I am tired of one forth of my precious free time being used up suffering through tasteless pitches for useless crap that I don’t want. Have I made it clear that I don’t want commercials? If it is not clear than I will be happy to tell you again. I DON’T WANT COMMERCIALS.
So, here is my proposal. Netflix, go ahead and charge me more money. I will pay it. Try and keep your costs down, and name the percentage profits that you want to make. After that there should be some amount of money left. This should be split between the content authors and distributors. If I watched half Star Trek and half Dr. Who, then half of the money left over would go to Paramount, and the other half would go to the BBC. This may be a simplified version of the reimbursement of these companies, but you should get the general idea.
Is it a pipe dream? I don’t know. But what I do know is that there is no way I can keep watching as much TV as I want for $8.99 a month. (Or $16.99 in my guilt crazed loyalty to this company. But that should drive the point home. So much do I hate commercials, that out of the goodness of my heart will I pay more than I have to. Netflix should consider this like a tip.)
So what’s the take home here? If you hate commercials too, take a stand. All of the major video game consoles will let you watch Netflix on your TV. (X-Box, Playstation, and the Wii will let you stream Netflix through the console.) If you don’t have a video game console you can purchase a Roku box or simply hook up a computer to your TV. Then call up your cable company and tell them to take a flying leap. Then start consuming commercial free TV for $8.99 a month. But be prepared to have your rent raised some day. Nothing is for free. Fight consumerism by paying for what you really want.
Recent Comments