Study: Netflix, Hulu Subscriber Sign-Ups to Decrease Throughout 2012/2013
April 5, 2012 1:37 PM
comment(s) - last by
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
This article is over a month old, voting and posting comments is disabled
4/7/2012 4:55:37 PM
Did the cable companies pay for this report? This report fails to mention the differences between business models. Netflix writes checks, so their costs will go up for sure. And if they raise their prices, it'll still be cheaper than cable.
Hulu does revenue sharing and from recent articles they pay more per user than the other streaming models. Guess commercials are a good thing after all.
What this study should be talking about is the demand and the need to kick up revenues from the growing crop of online viewers.
I haven't had cable for over a year and I LOVE it. I don't even have a TV now. I watch everything online. The majority of it through Amazon or Hulu or iTunes. I like that I can pay for some shows and see other ones for free on Hulu. But I must be honest - if HBO had the balls to offer an online only service for their Originals only for $20 a month - I'd subscribe in an instant. Sure they made $28 from me on Season 1 of Game of Thrones, but I would've paid $200+ for the privilege to have seen it while it was on along with other HBO Originals... Cash on the barrel!
As for sports, I just watch the NFL and again I'd happily pay $20 a month to watch a select amount of teams or just to follow my team alone! And I'm not the only one who's willing to pay.
And there's nothing stopping the NFL from doing this, because we all know that the only group that makes money off the NFL - is the NFL. So why isn't the NBA doing this or Baseball (and if they are already in some or all markets, then I stand corrected)?
Granted TV rights and syndication and licensing are big business and online is the new frontier. But it's filling up with a market of people who are willing to pay ala-cart. So sell it to us. In the age of the debit and credit card you can get the money right away. Price it right and you'll have some easy money.
Why isn't it happening? I know why. Because these big brave men of industry are nothing but a bunch of fat, old, scared, weak and out of touch men. And I'm being a little harsh... this is still the dawn of the new age and the money is smaller than traditional methods - but I thought we were a nation of capitalists?
"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates
Comcast Doesn't Want to Offer Netflix on Its Xfinity TV Service
March 9, 2012, 11:46 AM
Reed Hastings Sees Netflix Joining Forces with Cable Service Providers
March 1, 2012, 10:57 AM
Netflix Underestimated Customer Backlash, Lowers Q3 U.S. Subscriber Forecasts
September 15, 2011, 1:33 PM
Netflix Explains Why it Raised Prices
July 18, 2011, 9:30 AM
New Netflix Plans/Pricing Announced
July 12, 2011, 7:21 PM
Facebook Adds Satire Tags to Its Auto-Generated "Related News" Posts
August 18, 2014, 10:43 AM
Comcast, TWC Pull Dinner Gift for FCC Commissioner... Sort Of
August 15, 2014, 1:10 PM
Comcast Accused of Wooing FCC Commissioner w/ $110K Dinner
August 13, 2014, 8:20 PM
Quick Note: Nokia’s Lumia 520 Available for $39.99 Off Contract Today Only
August 13, 2014, 10:37 AM
Wikipedia Scores $140,000 in Bitcoin Donations in One Week
August 11, 2014, 9:32 AM
China to Require Real Names for Chat Apps
August 8, 2014, 8:28 PM
Most Popular Articles
Apple Scores Patents, Preps New Reversible USB Plug for iPhone 6 Connector
August 18, 2014, 1:32 PM
New AMD Fusion-Based Laptop From HP to Pack a Punch at $199
August 18, 2014, 4:13 PM
BlackBerry Reinvents Itself, Prepares for Potential Smartphone-Free Future
August 18, 2014, 7:51 PM
New Photos Show “Assembled” iPhone 6, Protruding Camera Ring
August 20, 2014, 2:32 PM
Lumia 830 Gets Major Upgrades Including New 20.1 Megapixel Toshiba Sensor
August 15, 2014, 6:00 PM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information