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More Cable Viewers Are Cutting the Cord
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The rapid advancements in video and computer technology are changing the way many people are watching television. Many are choosing to forgo cable TV and opting to use their computer. Cable TV companies are trying to keep up with technology and hang on to their subscribers.
Since moving into a Hilliard townhouse this year, Ray Combs and his family have not had regular cable service for his 32-inch flat screen television. The TV sits near a computer. The computer has become his cable box. He uses an internet stream and Netflix to watch his favorite programs and movies.
“We just decided you know for ourselves it was costing a whole lot more money to go with those channels and we, I mean, really the stuff that we can watch on Netflix and stuff like that is the same stuff we can watch on our cable. I mean they’ve got all the TV shows and all kinds of stuff on. Reality TV is what we was watching,” Combs said.
He admits that some programs like cable news he cannot access in real time.
“We can get our news on our computers or phones, stuff like that, so we don’t feel like we’re missing out on anything,” Combs said.
Combs said he gave up cable when he lost his job and had to cut expenses. He said instead of more than $100 a month he now pays less than $40 to get the same programs his family watches.
The Combs are not alone. It’s called Cutting The Cord. The Convergence telecom Consulting Group estimates a million TV viewers cut the cable cord last year.
Cable TV providers are caught in a bind. To offer the latest HD and 3-D digital technology they have to invest in new equipment and pass the cost along to subscribers â€” even some who don’t want the new technology. At the same time the cable companies face competition from lower priced alternatives â€” like Netflix.
Assistant Professor of Marketing at Otterbein University, Michael Levin studies the cable TV industry.
“I think you are going to see resistance to that as programming fees go up, as the bill gets larger, I think people are going to reconsider. Wait a minute, why am I? You’re no longer giving me a compelling reason to justify spending more money for you,” Levin said.
Levin said the competition will only increase as phone and satellite companies offer more services.
“I think that’s the trap that could get them because you can always find an alternate to the service being provided. If you don’t like my Internet service, you can find somebody else. If you don’t like the amount I’m charging you say for movies, you can find Netflix. Even sports programming does have workarounds,” Levin said.
Time Warner Cable serves two-thirds of the Central Ohio Market. Spokesman Jeff Ortega said Time Warner offers service tiers so subscribers can select a package with price guarantees that fit their budgets.
“We feel as a company, we’ve been very responsive to the marketplace in terms of providing not only great products that people want, but at a price they can afford,” Ortega said.
Ortega adds many customers will not face a price increase even as the company offers a 4G network which allows mobile wireless Internet access throughout the country.
Insight Communications spokesman, Jason Keller said his cable-TV company is meeting the various needs of its customers without charging everyone the highest rates.
“If a customer wants 100 HD channels we can provide that, if they only want just their local broadcast channels and a few cable channels, we can do that too,” Keller said.
And the race to keep customers will continue. Last month, Time Warner started offering an application where subscribers can watch cable TV on their iPads.