1) CUTTING THE CABLE
The television industry is experiencing a structural shift due to the Internet. No longer
confined to a sole cable provider, consumers have dozens of options to view their favorite
shows and movies. Below we break down the present and future of the industry.
THE EVOLUTION OF TELEVISION AND VIDEO
To understand where video might go, it’s important to know where it’s been.
1997
1998
2000
2004
2007
The television is the fastest adopted
invention in U.S. history. Nearly half
of all households owned a TV by 1955.
ET
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DV
D
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VC
ISIO N
REAM
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VIDE
ST
O
ND
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1979
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TT
1976
INTERNE
ON DEM
1948
AM VIDE
RE
O
TELLITE
SA
LE
HISTORY
OF VIDEO
1939
MAINST
IN-HOME
CAB
G INTER
Telecom companies introduced
TV service delivered via the
Internet and fiber connections.
THE CURRENT STATE OF VIDEO
Video consumption today can generally be broken down between traditional and new formats.
TRADITIONAL MODELS
NEW MODELS
• Subscription
Stand-alone subscription
• Cable • Fiber
• Satellite • Internet TV
via the Internet to a channel
or streaming provider.
• Stand-alone down
Pay per individual
load of a movie or TV
series via the Internet.
DEVICES
THE INTERNET EFFECT
Given new options and rising cable costs, more consumers are cutting the cords in a variety of ways.
CORD CUTTING
Canceling traditional TV in favor of Internet video
Nearly
Traditional TV
subscribers are shifting
from cable to telecom
operators, and Raymond
James believes the
switch is largely due to
service quality and prices.
50%
CORD SHAVING
Downsizing to smaller, less expensive TV bundles
33%
67%
of Raymond James survey respondents want to
downgrade their traditional TV package.
CORD NEVERS
Having never subscribed to traditional TV
77%
OF ALL INTERNET
TRAFFIC DURING
PEAK USAGE
TIMES IS VIDEO
of all cord cutter households earn >$75,000 per
year compared to 33% for traditional TV households.
of millennials are more likely than the average
viewer to have never subscribed to traditional
TV service, and 67% more likely to be cord cutters.
FROM 2008 – 2014
TRADITIONAL TV
SUBSCRIPTIONS
INCREASED
7 %
.3
Internet video subscriptions
are growing, but are
largely complementary to
traditional TV according
,
to Raymond James experts.
New video services are not an immediate threat to traditional TV but the threat is growing.
,
We expect consumers will subscribe to both traditional and new video providers, and have
a more expensive broadband Internet connection. Traditional TV providers will need to
provide more options to remain competitive and convince consumers not to cut the cord.
©2015 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. ©2015 Raymond James Financial Services, Inc., member FINRA/SIPC.
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