HBO and CBS both announced the development of their very own over-the-top (OTT) video services last week, setting many to wondering whether the cord-cutting—that is, the cancellation of traditional cable and satellite service—would start as a trickle or a flood.
But is combining a bunch of streaming services a rational approach to streamlining one’s entertainment experience?
ABC News and the Associated Press took a look at things from a cost perspective, and totted up the monthly dues for Netflix ($8.99), Hulu Plus ($7.99), CBS All Access ($5.99) and the expected price of HBO's service (about $15), and came up with $37.97, a figure that is roughly half of the average price of a traditional cable or satellite subscription (the FCC pegs it at $64.41).
However, let’s consider content. HBO will give a viewer, well, HBO. Enough said there. A subscriber would pay a premium for the service regardless of whether he or she takes a cable subscription or not.
Hulu has the closest thing to a traditional pay-TV content bouquet available, including current-season and past-season episodes of series from all major broadcasters: FOX, ABC, CBS, NBC and the CW; plus, cable channels like Comedy Central, Nickelodeon and Bravo.
CBS offers current-season fare for 15 network shows on-demand a day after they air, and live streaming in 14 markets. It also has some perks in the pipeline like 24-7 feeds of the Big Brother house when it kicks off again next summer.
It should be noted that rabbit ears can give a person free access to the same broadcast channels that Hulu and CBS offer, just on a linear basis—so the on-demand and catch-up TV aspects are really the differentiators for both.
And Netflix mostly offers and older content, except for its original series, like Orange is the New Black, Arrested Development and House of Cards. 4K will also be part of the mix next year; but then, chances are good that if you own a 4K TV, you aren’t likely to be overly concerned with entertainment cost containment.
A key piece of all of this is that there are no sports involved—neither CBS nor Hulu offer network coverage of NFL games, for example, nor ESPN content. So unless a sports fan is willing to hit the sports bar every time there’s a game on, this is probably a deal-breaker.
Taken together, the content—and lack thereof—can be a problem for OTT—and a boon for cable.
"The way things are priced, you won't be able to get more than four or five channels for less than your pay-TV bill now, and even getting two or three channels will be a significant portion of that bill," FBR analyst Barton Crockett told ABC News (which, incidentally, is owned by Disney and is a sister channel to ESPN). "I think because of that there will be a strong incentive for people to sign up for a (cable) bundle."
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