From Analog to Digital- Or Just Cut the Cord

Posted: August 24, 2011 in General Information, What's Happening Now!
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Carolle and her husband Jack cut the chord with the Satellite TV and Rogers Cable a few years ago when they moved. They just felt the price did not warrant its uses for the small amount of TV that they watched. They don’t really miss it but when the local movie rental company went bankrupt they thought they’d look at other options so that they would be able to entertain the grandkids when they came over. They also had to make the swith from analog to digital TV so they could watch their local evening news.

Carolle purchased an Apple TV and a Netflix subcription along with a digital antenna, and is now among a new breed of gadget-savvy viewers who are cutting their ties to TV subscriptions. And while in a small minority – less than 10 per cent of Canadians get their TV over-the-air – viewers like them could soon pose a problem for cable and satellite players like Rogers Comunications Inc. BCE Inc. and Shaw Communications Inc.

“So-called cord-cutting might not yet be a major threat to those companies. But as Canadians increasingly look to alternative platforms to watch TV and movies, it’s a disruption the industry cannot afford to ignore. Canadians spent 61,267 minutes online in June, a 7 per cent increase from the year before, according to Internet tracking firm Comscore. A major slice of that time, 25,587 minutes total, was spent watching video – a 42-per-cent increase from last year. Since its launch last September, Netflix has surpassed one million subscribers in Canada who pay $7.99 per month for its streaming video service.

And as Canada’s digital transition comes into effect next week, the appeal of sticking with over-the-air channels could increase. Those stations will be moved off the analog spectrum – with its sometimes fuzzy signals and occasional snowy screens – and converted to crisp, high-definition digital signals.

“There will be a subset of the population who, when they realize just how good the [digital] signal is – particularly those who are close to the U.S. border – there will be a strong attraction to looking at over-the-air television,” said Jerry Brown, a media analyst with PricewaterhouseCoopers.

In response to viewers’ changing habits, TV providers such as Rogers are focusing on building their own Netflix-like services – such as Rogers on Demand Online or Illico Web in the case of Vidéotron Ltée. David Purdy, vice-president of video products for Rogers Communications Inc., believes this type of “TV Everywhere” platform will help distributors hold on to their subscribers.

“There’s always going to be a small percentage of the market that is willing to go to great lengths not to pay for their TV signals,” Mr. Purdy said. “But most of our customers have told us they want it to be simple.”

It may be foolish at this point to ring the death knell for cable and satellite TV, but the U.S. example is informative. When the United States had their digital TV switch in June, 2009, only a small minority of Americans who got their TV for free abandoned the over-the-air model in favour of a TV subscription; 74.3 per cent of rabbit-ear households had gotten their hands on digital tuners by the end of that summer, according to Nielsen.

In the meantime, Pickering, Ont.-based V and E Antenna, which installs digital antennas for households, has seen business take off. It usually receives about 40 calls per month from prospective customers, but in July and August, that call volume has tripled. Many of the customers they visit complement the antenna signal with Boxee boxes, Netflix subscriptions, and Apple TVs, president Eric Skura says.

The only down fall is that a couple of networks have the monopoly on sports content but in Carolle and Jack’s household that’s not an issue as they watch little sports other than occasional golf and hockey which is available through their local station.

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