So called cord cutting, the term for going without pay-TV, is a real threat to pay-TV providers. Experian Marketing Services has found that the trend is not only real, but accelerating: The report said the percentage of U.S. households without pay-TV jumped from 4.5% in 2010 to 6.5% last year.
Pay-TV providers have gotten the memo; after originally resisting any changes, these providers are slowly adjusting to this new paradigm. The latest company to acknowledge the current model is unsustainable is AT&T. A recent deal of $39 per month for broadband Internet, basic channels, Amazon.com Prime, and Time Warner's HBO appears to be an implicit admission that providers need to present better value to compete with Hulu- and Netflix-only households.
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