Alternatives to cable making an impression

An Optimum service van of Altice on an Aug. 25, 2016 service call on Gregory Boulevard in Norwalk, Conn. An Optimum service van of Altice on an Aug. 25, 2016 service call on Gregory Boulevard in Norwalk, Conn. Photo: Alexander Soule / Hearst Connecticut Media Photo: Alexander Soule / Hearst Connecticut Media Image 1 of / 8 Caption Close Alternatives to cable making an impression 1 / 8 Back to Gallery

Christien Ducker does not know why she didn’t do it sooner, but she is doing it now — in the next week or so, she plans to slash her $200 monthly bill with the cable company by cutting the cord for TV and landline telephone service.

If new numbers from the state of Connecticut are any indication, she is not alone.

For the 12 months ending in June, Connecticut tax revenue from cable, satellite and telephone carrier video charges dropped 21 percent, a $12.2 million reduction. While the tax data is preliminary, in past fiscal years the early figures hewed to the overall direction of the final numbers, which had escalated by double-digit percentages three years running.

If the data hints at more people dropping cable service in favor of other viewing options — particularly Internet-based video services, whether streamed to smart TVs or mobile devices — there was further data supporting that contention in mid-August, when SNL Kagan released a report predicting that residential cable TV revenue will drop by a compound annual rate of 0.5 percent annually over the next decade.

This past week, Nielsen provided the starkest evidence yet of people’s willingness to eschew traditional cable TV in favor of streaming. For the 2016 Rio Olympics, NBC Sports saw a 17 percent decline in prime-time viewership compared to the 2012 summer games in London, even while running away with the ratings competition against other networks.

NBC Sports more than made up for the loss of its traditional TV audience thanks to streaming content that generated 45 million hours of viewing by people worldwide.

Ducker, a resident of Norwalk, says it will not exactly be going cold turkey, already using services like Netflex and Hulu with a Roku device. She plans to continue using broadband service from Altice subsidiary Cablevision, but rely on “over the top” video streams over that pipe and her existing wireless phone service instead of cable TV and traditional phone service.

“We kept looking bills and they kept creeping up,” said said. “We said, ‘wait a minute — we don’t use half these channels. ... It’s time to bite the bullet.’”

How much will she save? While Altice charges about $40 for its basic cable TV package, not factoring in limited-time promotions, the company’s “value package” with vastly increased channel lineups costs twice as much; add in DVR and an extra cable box for a second household TV, and the monthly bill approaches $100 including taxes and fees.

Cutting the cord is no freebie — for those who want to adhere as closely as possible to the cable TV experience, they must factor in the continued cost of a broadband connection; buying a smart TV or enabling Internet device, whether a game console or purpose-built devices like Amazon Fire TV, Apple TV, Google Chromecast or Roku; and paying for one or more streaming services such as Amazon Prime, Hulu, NetFlix or Sling TV.

Ducker and others have the attention of the people in the corner offices. In the second quarter, Stamford-based Charter Communications managed to increase its video subscriber base 1 percent from a year ago, but CEO Tom Rutledge acknowledged during a conference call with investment analysts earlier this month that “the inertia is real in the marketplace.”

“There is an income issue with television — it’s very expensive to buy the whole package (and) it's hard to sell smaller packages that resonate in the market and are sticky and satisfy consumers,” Rutledge said.. “Various marketing tactics have been tried to skinny down the product — the problem is skinnying it down to the right place with the right package and satisfying people who are financially challenged. And we’ll continue to explore relationships with content companies to do that.”

As for the content providers, they appear confident they will make money no matter what channel their fans use, whether Stamford-based WWE, which runs its own Internet-based WWE Network in competition with cable network partners that carry its programming; or titans like Walt Disney, which owns a controlling stake in Bristol-based ESPN, alongside minority investor Hearst.

“Where we can monetize the most is where the content will go,” said Disney CEO Bob Iger said in a mid-August conference call. “What will be interesting is long-term, to what extent do we hold back product to ... (sell) direct to consumer versus third-party distributors? But it’s really premature to get into all of that because right now we’ve got kind of a best-of-all-worlds in the sense that we’re monetizing really well on multiple platforms from multiple parties.“

Alex.Soule@scni.com; 203-354-1047; www.twitter.com/casoulman