What Cord Cutting and Streaming Services Mean for Telcos

Posted on February 22, 2018 by Sincera Staff

Sincera Staff

In an environment driven by the emergence of new technology and its immersive adaptation by today’s consumers, it comes as no surprise when yesterday’s tech begins to lose its shine in the shadow of today’s ideas. Just as smartphones revolutionized the way consumers interact with one another, cutting-edge video streaming services are beginning to surpass traditional cable providers in the race to appeal to the content-crazed consumers of today.

Cord Cutting Consumers

In today’s market, many consumers are cutting the cord on their cable subscription in favor of streaming services like Netflix, Hulu, and Prime Video. In 2016, satellite and telecom TV services were reported to have lost 1.7 million paid subscribers. This cord cutting statistic was only echoed in 2017, when between 1.8 and 1.9 million consumers were estimated to have abandoned their paid subscriptions for alternative streaming platforms. This shift is slowly becoming the new norm when considering how many households now have access to high-speed broadband networks. According to USA Today, over 82% of U.S. homes enjoy high-speed internet access. Experts also attribute this transition to increasing cable subscription prices and output of quality content by rival streaming services as they increase in demand and popularity.

Streaming Statistics

Streaming services offering over-the-top (OTT) video are becoming increasingly preferred over traditional media, especially for young adults. A recent survey of U.S adults was able to conclude that 61% of consumers between the ages of 18-29 look to streaming services like Netflix, Hulu, or Prime Video as their primary source of television. With younger generations actively driving this new age of media consumption, many major networks are racing to provide high-quality content to these data hungry consumers by shifting packages to offer OTT video and premium content.

In an effort to capitalize on the cord cutting market, major companies have begun bundling packages and streaming services to include live TV, while also setting their sights on obtaining rights to current popular series. YouTube and Hulu are two early adopters of such strategies, providing consumers with wide access to original content while offering a plethora of live channels. Netflix continues to lead the streaming scene, with plans to spend nearly $8 billion on content in 2018, illustrating the growth of this new segment. As major platforms and networks transition to take advantage of this opportunity, telecom operators must also adapt.

What This Means for Telecommunications

To adapt and maintain relevancy as streaming services become the societal norm in media consumption, telecom operators must ensure that their networks are able to support the growing demand for live and on-demand video. In an attempt to compete in this cord cutting era, companies should increase bandwidth, integrate content-caching systems to reduce operator and content-provider costs, utilize Carrier Ethernet, incorporate policy control and packet inspection tech, and accelerate the implementation of SDN and NFV technologies.

The knowledgeable professionals at Sincera Consulting can work with you to identify improvement opportunities to ensure that your network is functioning optimally to cater to new trends in content consumption while remaining competitive.

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