Cord cutting craze, the end of traditional TV?

The joy of watching a TV show from start to finish with no breaks was an occasion seldom found in the past. There might be a couple of times a week when you taped your favourite show, a few commercial-free holiday specials, or in more recent times, there was PVR – until the device became full and shows started piling up like drivers in a snowsquall.

With the blossoming market of streamed TV, consumers are cutting their traditional cords and diving into the stream – web stream, that is.

The pioneer behind the colossal market shift is Netflix. In 2007, the company delivered its billionth DVD and began its departure from its original business of being a rental company to the contemporary video-on-demand service.

Fast-forward to the latter end of 2014 and Netflix boasted more than 50 million subscribers worldwide all paying a monthly fee for its video services. Users have access to thousands of titles of various movies and TV shows.

Now the traditional mega-media conglomerates in Canada have released their own video-on-demand services in response to Netflix. Rogers Communications and Shaw Communications came out with Shomi in November 2014 offering 1,200 movies and 340 TV series.

A month later Bell Media released CraveTV with a library of 10,000 hours of content on its launch date.

Rogers On Demand, a video-on-demand service, was Rogers’ main streaming service until the release of Shomi. Customers had to pay a minimum of $3.99 to rent one movie for a 48-hour period. Netflix subscribers have been paying the same monthly $7.99 for years to access thousands of titles at anytime.

The four big telecom conglomerates – Rogers, Bell, Quebecor and Shaw Communications – have long enjoyed free rein over the television market in Canada.

“These four media conglomerates together own Canada’s most significant conventional TV broadcasters, cable networks, specialty channels and web platforms,” said Tanner Mirrlees, assistant professor for UOIT’s Faculty of Social Sciences and Humanities.

He added that Netflix was able to infiltrate the Canadian TV market by offering a service that the telecom giants were lacking at a more efficient cost compared to traditional cable and satellite services.

“It likely took them so long to get involved with the transition because they didn’t see the transition as a significant threat to their bottom line,” said Mirrlees. “Facing little genuine competition and enjoying their extraordinary market power, they perhaps did not see Netflix as a serious rival and thus, failed to innovate.”

Canadians are now able to bypass these conglomerates for a product more beneficial to the consumer than previously available.

“The people who tend to be switching over to streaming multi-platform TV are typically the 18-36 year old ‘millennials’,” said Mirrlees.

The traditional workweek is a thing of the past in today’s innovation driven economy. Students and many working people have varying, unpredictable schedules. Video-on-demand services have given them previously unheard of flexibility for television consumption.

“Between going to school and the amount of hours I spend at work I don’t really have time to keep up with television. Netflix is just really easy to put on a show before I go to bed,” said college student Janiece Gray.

Netflix has revolutionized the way television is consumed. The company is now creating its own content, with some shows even receiving Academy Award nominations. It has potential to one day operate autonomously, which could further shake-up the television industry.

“Despite all of the present-minded excitement surrounding the multi-platform streaming TV ‘revolution’, it is unlikely that the convergent media conglomerates, which control almost the total means of producing, distributing and exhibiting TV shows, will let Netflix take too big a slice of their digital TV exhibition pie,” added Mirrlees.