OTT Extravaganza: An Explosion of Choice Should Put Cable on Notice


As more and more mainstream content providers offer over the-top (OTT) streaming options, consumers are mulling in ever-greater numbers the value of cutting the cord, i.e., ditching their cable, satellite or telco TV subscriptions. Conventional wisdom has held that creating a de facto replacement for cable services by cobbling together several OTT options doesn’t make sense financially (or from an ease-of-use standpoint). But that has radically changed.

Consumers have a varied choice in front of them in terms of how best to approach their entertainment options in an OTT-only world. In many ways, consumers are almost hamstrung by the surfeit of options. There are so many paid services available, but they each have their own unique set of costs, benefits and drawbacks. How to choose?

To help make sense of it all, it’s worth taking a look at a few of the top paid OTT options, including incumbents like Netflix and Hulu, single-channel fare like HBO Now and CBS All-Access, and brand-new services like Sling TV from DISH and Sony PlayStation Vue.


Netflix, the granddaddy of the streaming set, claims 56 million subscribers globally, each paying around $8 per month for streaming access to what is mostly a host of library content, reruns, older movies and the like. It has steadily added to its differentiating content stable though, with a massive investment in original series, and buying exclusive access to others. As part of its plan to plow $3 billion into content this year (and $6 billion in the next three years), it will continue to sign deals with the likes of Adam Sandler to develop original movies and expand internationally. In August it will premiere its first original flick, a sequel to the Ang Lee masterpiece, Crouching Tiger, Hidden Dragon, and the company has pledged to support indie filmmakers, even picking up new fare at SXSW this year.

Cost: $8/per month

Content Benefits: Access to buzzed-about, Emmy-bait original series like House of Cards and Orange is the New Black; a decent kids’ selection of curated content; and soon, plenty of original indie films if you’re into that sort of thing. It’s also available nearly ubiquitously—it puts the “multi” in Multiscreen.

Drawbacks: Even though it’s looking to carve out its own value-prop with original productions, Netflix’ stable is still mostly made up of library content, which means that popular blockbusters and current-season TV is almost nonexistent in the portfolio. Also, all content is on-demand, meaning that as a replacement for a cable subscription, it can’t fully fit the bill. Obviously, it offers no access to news, sports, contests or other time-sensitive titles.

Hulu Plus

If Netflix is casting its lot with the indie set, Hulu is the popular kid, making its name on the back of access to current-season TV, like the Voice, Last Man on Earth, Modern Family and so on. It’s owned by Disney, NBCUniversal and Fox, and was originally created as an online repository for its parents’ content, in the days before TV Everywhere. Now, Hulu Plus still trades on the fact that it lets viewers have exclusive OTT access to hit current and back-season TV shows and movies for $7.99 per month. It also has a lot of exclusive deals for the full back catalogs of classic and beloved series, like the Cosby Show, Cheers, the Brady Bunch and I Love Lucy.

Cost: $8/per month

Content Benefits: If you like TV, specifically broadcast network TV, including current-season fare, this is the service for you.

Drawbacks: Like Netflix, it doesn’t offer live streaming content, and it offers very little in the way of cable network series. But the big hole in Hulu’s content offering, given its stated broadcast niche, is CBS, or rather, a lack thereof. It can stream older archived content from the Tiffany Network, such as I Love Lucy and Star Trek, but don’t go looking for the Big Bang Theory, NCIS or Two and a Half Men. There are also zero current-season CBS shows—the only exception to this is Entertainment Tonight, which provides access to clips the day after. Which brings us to…

CBS All-Access

Launched last fall to great fanfare, CBS All-Access, true to its name, offers viewers thousands of episodes from the current season, previous seasons and classic shows on-demand. This includes existing-season episodes of 15+ prime-time shows with some episodes available the day after they air. And, crucially, subscribers can live-stream local CBS stations in most of the largest markets at launch, with more to be added as affiliates join. Network chief Les Moonves said that the service has been especially successful with its news content, and that it may offer pay-per-view (PPV) live content around concerts or other special events going forward.

Cost: $6/per month

Content Benefits: With live TV feeds and a host of current-season shows from the No. 1 network in prime time, TV hounds may love this option—although as we note below, there are caveats.

Drawbacks: The biggest issue with All-Access, aside from the fact that it’s only a CBS vehicle, is the fact that NFL games will not be shown. College sports can be streamed via affiliate feeds, but not pro football. And, those live TV feeds can be accessed for free over the air with the purchase of a set of rabbit ears (with sports intact). The other thing to note is that not all current-season episodes are available on-demand—some series have made only a handful available.


HBO is the other big-name, single-network offering to make headlines on the OTT front. HBO Now is the standalone version of the premium net’s HBO GO app, which offers access to every episode of every HBO series ever made—along with original documentaries and miniseries, and a monthly selection of movies. A self-proclaimed “Millennial missile,” the $14.99 per month service allows lovers of HBO to still get HBO when they say sayonara to their cable subscriptions.

Cost: $15/per month

Content Benefits: All HBO content, from the beginning of time. Previously, in order to get HBO, one had to pay $15 per month on top of a cable subscription. Now, one can just pay $15 per month. From an a la carte standpoint, it’s a net-net for cord cutters, who would pay the same for the content whether they took a traditional pay-TV subscription or not.

Drawbacks: The only real issue here is that at launch (coming in April), in order to access HBO Now, you have to have an iPhone, iPad or Apple TV—no Web access. Subscribers of Cablevision’s Optimum ISP packages will also be able to order it—but device support and pricing haven’t yet been announced.

Amazon Prime Instant Video

Amazon offers the most directly analogous service to Netflix. It too has a wealth of library content on offer; it too has been working hard on its original content propositions and exclusives (the latter includes 24, the Americans and BBC America’s big hit, Orphan Black). Critical acclaim for a TV series like Transparent with Jeffery Tambor and a unique content-vetting process that allows viewers to vote on which pilots will get greenlit for full seasons, have set Amazon apart on the original content front. Also, the streaming video is part of the Prime bundle that includes free two-day shipping on e-commerce goods, photo storage and access to Kindle eBooks.

Cost: $99 per year, which works out to $8.25/per month

Content Benefits: Plenty of library content and originals; more recent hits than Netflix; and unique exclusive deals to air some shows the day after their TV debut (as with CBS’ Under the Dome and Extant). Plus, you get free shipping for store orders, so if you do a lot of shopping on Amazon, this is almost a no-brainer. It also has widespread device support for multiscreen access.

Drawbacks: Like Netflix, all content is on-demand, meaning that again, access to news, sports, contests or other time-sensitive titles are verboten. Also, the $99 must be paid up front.


Sling TV is marketing itself as a “skinny” TV package for cord-cutters and Millennials. The Best of Live TV core package service is one of the first OTT offerings to deliver live sports, with ESPN and ESPN2. Its bouquet also includes lifestyle, family, news and information channels, from TNT, TBS, Food Network, HGTV, Travel Channel, Adult Swim, Cartoon Network, ABC Family, Disney Channel, CNN, El Rey and Galavision. Plus, it has the AMC flagship network, BBC AMERICA, BBC World News, IFC, Sundance TV and WE tv. In addition, thematic add-on packages are available for $5 more per month to allow subscribers to customize their content choices. These include sports, lifestyle, kids and news—though the latter only includes HN, Bloomberg and international choices.

Cost: $20/per month

Content Benefits: Sling TV is real TV, as in it offers linear, live channels. It also has widespread device support for multiscreen access.

Drawbacks: There’s very little on-demand content, and there’s no DVR option. Also missing are broadcast channels and news choices. CNN/HLN and Bloomberg are the only U.S. news options.

Sony PlayStation Vue

The PlayStation Vue over-the-top service is launching in three markets—New York, Chicago and Philadelphia. Initially, Vue will offer three no-contract service tiers that range in price from $49.99 per month for 53 channels, to $69.99 per month for about 80 or so networks. Subscribers can access the service via the PlayStation 3 and 4 gaming consoles, and can make use of a differentiating 28-day cloud DVR feature.

Cost: $50-70/per month

Content Benefits: Sony is offering the most cable-like content proposition out there, offering a replacement for the lower pay-TV tiers. It offers tons of basic cable nets with access to live feeds and on-demand content, and, uniquely, the major cable news outlets (CNN, MSNBC and FOX News). It also has access to the FOX, CBS, NBC and Telemundo broadcast networks. If comparing Sling TV and Playstation Vue, Vue wins hands down—but it costs more and has at least one major drawback.

Drawbacks: Despite a decent sports catalog, it doesn’t offer ESPN, like Sling TV does, so sports fans may feel that there’s something missing. Also noticeably absent is the rest of Disney’s content, including ABC. Also, and this is a biggie: The service isn’t multiscreen. It can only be used via Sony’s game consoles, so right now its addressable market is limited (especially considering that only three markets have gone live). There was some mention of an iPad app, but no further details have been released. Because of this, MoffettNathanson analyst Joel Espelian called the service “dead on arrival.”

So…what’s a would-be cord-cutter to do? An estimated 95.2 million U.S. households subscribe to pay TV while about 87.3 million are broadband only subscribers. Are consumers that like a wide smorgasbord of content types better off sticking with their existing pay-TV provider?

Our analysis says no.

Obviously, the types of content that are important to someone will vary and be highly personalized. But let’s say that a user takes Hulu Plus ($8) and CBS All-Access ($6) to replicate broadcast access, along with HBO Now ($15) and Sling TV ($20). At this point you have a close approximation of a basic cable TV service, for the grand total of $49 per month—much cheaper than traditional TV. Adding either Amazon or Netflix for an on-demand TV and movie option ($8 each) bumps up the cost to $57—still cheaper than cable.

via Shutterstock

It’s also worth noting that there are also plenty of free, ad-supported online streaming services, like Popcornflix and Crackle, along with services that allow users to buy or rent TV episodes and movies on a transactional basis, like Wal-Mart’s VUDU and Apple TV (via iTunes). There are also niche offerings, like DirecTV’s Hispanic-focused service, Ya Veo, and a planned NBC service focused on comedy. So, users can always in-fill extra content.

So is cord-cutting becoming a real possibility as content options expand? You betcha, say the analysts.

Parks Associates forecasts 7 percent of U.S. broadband households could cut the pay-TV cord this year as more and more options hit the market.

“The pay-TV industry is experiencing a slow crisis in terms of paying customers,” said Brett Sappington, director of research at Parks. “Content is key to attracting and retaining consumers, and consumers are now looking beyond pay TV for that content.”

Also, in the past, traditional pay-TV could rely on the fact that they offer a convenient aggregation point for content thanks to the set-top box. But consumers are increasingly willing to make use of a Roku box or the like, switching between apps to get the content they want from various subscription services. The same goes for tablet apps. And with search options available that index OTT service catalogs, content discovery is becoming easier too.

“Consumers have extensive content choices, including live TV, VOD, and OTT streaming, and they are using multiple interfaces to access desired content,” said Barbara Krause, director of research at Parks.

Bottom line, traditional TV distributors can no longer rely on the breadth of content or the ease in accessing it that they provide to keep their subscribers loyal.

Krause added, “For consumers, the lines are blurring between CE makers, operators, and content providers, so they will make their decisions, first and foremost, based on who has the desired content and secondly on who provides the easiest method to find and consume that content.”

Edited by Stefania Viscusi
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TechZone360 Contributor

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