Why Now is the Time to Ditch Your Cable Service


With the economy in major flux, Americans are thinking about cutting corners. And according to Nielsen’s VideoCensus report for the month of September, some have already found a way.

We’re watching television online.

TV on your computer isn’t a new idea. Most of us have visited YouTube (STOCK QUOTE: GOOG) and watched a few minutes– a viral video, a clip from a TV show, or a how-to video produced by a helpful stranger. There’s plenty of content, but turning in your cable box for YouTube might feel like trading a novel for a collection of essays written by second graders. It’s cute, but rarely entertaining beyond its novelty.

That’s where sites like Hulu.com and Veoh.com come in.

Hulu.com, a joint venture between NBC Universal (STOCK QUOTE: GE) and News Corp. (STOCK QUOTE: NWS) offers television shows and films free of charge. It’s also growing quicker than any other video site.

According to Nielsen, Hulu.com amassed 142,261,000 streams in September compared to 105,830,000 generated in July. The Nielsen VideoCensus now ranks Hulu number six behind more established video sites such as Nickelodeon, MSN/Windows Live, Fox Interactive Media, Yahoo (STOCK QUOTE: YHOO), and, of course, YouTube. Another source, Compete.com, reveals that Hulu’s unique visitors have increased more than 52% in the last month compared with YouTube’s 0.6% increase in traffic.

Hulu’s success, and the success of similar sites, is due to the full-length TV shows and films it offers. But streaming TV through your computer does come at a cost. Unless you have an Xbox (STOCK QUOTE: MSFT), Sony Playstation (STOCK QUOTE: SNE), or a computer hooked up to our TV, you will have to watch on your computer screen. Also, shows do stream in lesser quality than when they’re broadcast on cable. But, that’s changing too. Hulu and Veoh are starting to provide some content in high definition.

The National Cable & Telecommunication Association’s 2008 Industry Overview reports that there are 64,900,000 basic cable subscribers in the U.S. from whom the industry will earn 79.1 billion dollars in revenue in 2008.

And that basic service doesn’t come cheap. Basic Time Warner (STOCK QUOTE: TWX) service in New York costs $51.95 a month. Add a DVR at $9.95 a month, and you’re looking at $750 a year before franchise fees and taxes. For most of us, access to the Internet has become increasingly important, so ditching your Internet provider isn’t an option. In that case, sites like Hulu and Veoh offer a chance to save hundreds in cable and DVR subscriptions without losing access to the shows we love.

Television isn’t the only reason we have cable, though. On Hulu, you’ll find nearly 400 movies from 15 different studios, organized alphabetically. There’s even more of a selection on Veoh. One bummer? As of now, they don’t offer new releases.
Perhaps some the money you save from cable can be spent on a subscription to Netflix (STOCK QUOTE: NFLX). For $8.99 a month, Netflix customers get one DVD at a time through the mail and access to streaming content via a “separate, smaller library” of films and TV shows. The content Netflix makes available for streaming will continue to increase if demand increases. If the Nielsen VideoCensus is any indication, it will.

Cable is convenient, but it’s pricey. Video sites, streaming a broad range of television and film, are a true alternative to TV. When these sites grow in popularity rivaling YouTube, or when YouTube begins to carry the same programming, the cable companies should start to worry.

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