Online streaming has been growing in popularity over television for some time especially among Millennials. According to Pew Research, 68% of all U.S. adults still cite cable or satellite subscription as the primary way of watching television. However, 61% of adults between the ages of 18-29 cite an online-streaming subscription as their main way of watching television.

Television vs. Online Streaming

Television vs. Online Streaming

This means that older cable/satellite-watching adults will be replaced with the younger streaming users over time if trends continue.

Cost-Effectiveness for the user of Online Streaming

According to the USA Today, the average cable bill in 2017 was $85 while the average satellite bill was $100. Meanwhile, a Netflix subscription (one of the most popular streaming services) is as little as $7.99 per month for the ability to stream on one screen. Hulu and amazon prime offer similar monthly fees. Therefore, even if you subscribe to multiple streaming services, you are saving considerably over cable.

The Rise of Production by Online Streaming Services

Now, what about the content you are able to access via streaming vs. cable? Netflix started as a DVD service with older titles and straight-to-DVD selections. Today, Netflix is not only a streaming service but also a production house with original content. Netflix’s original content now includes mainstream actors such as Drew Berrymore and Emma Stone. Other streaming services such as Hulu, Youtube Red, and Amazon Video are also producing original content. In fact, Hulu has one of the most popular series (the Handmaid’s tale) which won several Emmy awards in 2017.

The Flexibility of Online Streaming

Another one of the advantages that online streaming offers to viewers is the flexibility to watch on your schedule. Online streaming is typically a demand-based viewing system meaning that the user decides what to watch and when to watch it without having to depend on a predetermined programming. In online streaming, most series are available in entire seasons, meaning, users are able to binge watch entire seasons in a single sitting rather than waiting a week or longer for new episodes to be released. There are exceptions to this rule; Hulu releases episodes of its hit series the Handmaid’s Tale at a rate of an episode per week for example. However, once all episodes are released, nothing stops users from being able to binge.

Future of Advertising in Online Streaming

A tricky subject is the availability of advertising in online streaming. On cable tv, advertising is available through commercials on most channels except for the premium ones such as Showtime and HBO which are commercial-free. Online streaming services tend to be commercial free since your monthly fee covers production costs of original content and the cost of licenses to watch other content. As online streaming continues to replace cable and satellite, it will be interesting to see if they remain commercial free. With HBO and Showtime, advertisers have found creative ways to reach audiences ranging from paying for brief product-placement to having entire episodes written around a product. It will be interesting to see if these are the same tactics that will be used by advertisers to penetrate the online-streaming market.

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October 29, 2018

Television vs. Online Streaming

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