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Convergence Consulting Group expects a decrease in the number of customers signing up for Internet streaming services throughout 2012 and 2013 because of rising licensing costs

With the rising popularity of video streaming services like Netflix and Hulu, many believed that customers would say goodbye to traditional cable services and flock to more affordable internet-based alternatives. However, a new report says otherwise.

Convergence Consulting Group, a Canadian research firm, released a new report this week that shows a jump in video streaming popularity from 2008 to 2011, but predicts a decline in 2012 and 2013.

The report found that 2.65 million Americans left their cable TV providers for internet subscriptions between 2008 and 2011. Cable TV packages were just too expensive while internet subscription companies like Netflix offered low monthly prices for a variety of content that can be viewed on several different devices.

In 2011, only 112,000 U.S. citizens signed up for cable TV packages. This is a significant drop from 272,000 who signed up in 2010.

However, Convergence Consulting Group doesn't see this trend lasting. In fact, it expects a decrease in the number of customers signing up for internet streaming services throughout 2012 and 2013 because of rising licensing costs.

In 2010, Netflix had to pay $1.1 billion in streaming rights. In 2011, this price jumped dramatically to $3.9 billion. With rising costs, Netflix was forced to up its subscription prices from $9.99 a month for video streaming and DVD rental-by-mail to $15.98 for both, or $7.99 for video streaming or DVD rental-by-mail separately. This move angered customers to the point that Netflix was forced to lower its Q3 2011 subscriber forecasts from 25 million to 24 million. Other issues, such as limited streams and a DVD spinoff company called Qwikster (which was later killed off), caused customers to leave as well.

Convergence Consulting Group only sees streaming rights prices increasing annually from this point forward, and predicts that video streaming companies will have financial troubles ahead due to these price increases. In other words, the future of Netflix, Hulu and others is unclear for now, and high prices may lead to less relevant content, meaning fewer incentives for customers to join.

Last month, Netflix said it planned to join forces with cable services at some point in the future in order to compete with HBO Go, but Comcast later shot the video streaming service down, saying it had no plans to offer Netflix on its Xfinity TV service.

Source: Yahoo

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RE: I don't get their reasoning
By tayb on 4/5/2012 8:13:07 PM , Rating: 2
Your argument is nonsense. If you thought the content was crappy why would you bother downloading it??

RE: I don't get their reasoning
By TheJian on 4/7/2012 10:31:28 AM , Rating: 2
I'm just guessing here, but I don't think he thought it was crap until it was downloaded then watched. Most aren't firm believers in reviews these days with them being bought and paid for or being rated by hacks like NIELSEN. Who do they have watching the crap they say is popular? I don't know who votes on awards shows, but I'd venture its the same idiots using nielsen boxes...LOL.

Your argument is nonsense. You can't know how something tastes, smells, sounds etc until you...wait for it...TRY IT. Don't tell me to watch a trailer. I get the good 3 minutes of the movie's action sequences and then find the other 87 minutes or so is just some time I wish I had back...LOL. Cable will never get me back without going below $20 and allowing me to choose my, oh I don't know, 15 channels for that $20 (pick a good number and price, whatever, I just have no use for 30 spanish channels and a ton of music crap etc, public access crap etc.). I pretty much need USA/SCIFI (never should have changed to syfy...clowns), TNT, FOX, a few news channels and nature/ history stuff. The other 90 channels are useless. Heck a good 1/3 of them I can't even understand the language...WTF? Get out of my country. :)

You'd have me pay for HD I don't even get on most channels. Most of the stuff is still in 720p. I hope cable dies a quick death. Only google/microsoft/apple can stop them. Lay $20-40bil in pipes draped across america (these three could easily fork over 10bil each for the cause which seems to be about the price for blanketing america with fiber etc) and kill cable until they bleed to death. Charge $20 and kill them. They're such badly run bloated companies they'd go bankrupt before they could stop losses. I'd say this could be done in under 3 years then bought for a song if all 3 companies worked together to kill cable.

It's like turning the Intel boat around as opposed to nimble AMD. AMD is getting killed but I'm talking about turn around time to change a project etc (it's just a huge ship at Intel/MS). Take Itanium. Once they start down a path they pretty much run the course, where AMD just deletes the products from the roadmap without ever believing they can shove something down our throats (my preferred way to be treated by a company - delete your product if it sucks don't shove it down my throat :)).

They would have NO debt on these lines and would be total profit once it was all in place. Google appears to get this and is rolling out service in a few states. Apple looks to be starting in that direction (all are talking content etc to get off lic fees). People just need to realize you will need to give some stuff up for a while in order for this to happen. There are sacrifices moving off cable, but for anyone that can live without channels you lose you should head to netflix/hulu/vudu/crackle etc or a combo of them to cover more stuff. You will never lower cables prices by paying them. You need to LEAVE and hurt their financials. Phone too! Vonage, google voice etc. Maybe just move to cell, with Ting or one of the other non contract vendors.

I'm about to finish up convincing my parents to dump cable. I just had to secure a way to watch fox business for them (roku/raspberry pi covers that) and something in history/animal/nature to make it happen. Other than that when asked what they watched their list looked like mine with over 1/2 channels never even watched (like at all - they flick through favorites and that's about it when watching TV).

By HackSacken on 4/9/2012 11:02:24 AM , Rating: 2
So what do you do when you eat something from a restaurant that you didn't enjoy?

"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home

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