Why Netflix is crushing cable TV

Netflix is taking over cable TV and it can’t be stopped. Over forty percent of all U.S. households with TV and/or broadband Internet use a subscription video on-demand service like Netflix, Amazon Prime, or Hulu Plus, according to new data released by Nielsen. Among those households subscribing, 36 percent have Netflix.

So, why is the company skyrocketing and taking over cable? CEO Reed Hastings said in short: Netflix is a better product and experience than traditional TV.

“It's fundamentally that Internet TV is better than linear TV. The consumers can watch when they want, on what type of device they want, and the content has just got better and better. So the fundamental confidence about the large scale is because on-demand is a better experience than linear, and the entire market is going to move from linear to on-demand Internet television over the next 10 to 20 years,” Hastings explained.

Internet-streaming services offer the customer the ability to sign up and cancel at any time without any termination fees. For less than $10 a month, a consumer can sign up for Netflix, browse and see what it has to offer, and cancel if he or she is not satisfied. The company also offers a free trial period for the first month. Another benefit of the service is that it provides a different type of viewing. Based on what a customer is currently watching and its ratings, Netflix will suggest similar TV shows and movies.

Linear TV requires us to organize our schedules around a program of channels to decide from. Netflix’s on-demand viewing lets us watch what we want when we want on any device.

SNL Kagan stated that 10.5 million American homes had access to broadband, but didn’t subscribe to a cable provider. Netflix reported its third-quarter earnings on October 14, 2015, taking in $1.76 billion in revenue and adding 880,000 new subscribers in the United States.

The Internet video-streaming service has plans that start as low as $7.99/month. When we compare that figure to the price of cable TV, it’s a fraction of the cost. Optimum/Cablevision and DIRECTV offer its cheapest packages at $40.

So for less than a quarter of the cost, customers can watch any show they wish, anywhere, and according to their schedule; ultimately, it’s all about convenience— that’s what keeps Netflix growing in this technology-driven era.

Source: BGR