On Monday August 23, 2010, 7:04 am EDT
It is a fantasy shared by many Americans: dropping cable television and its fat monthly bills and turning instead to the wide-open frontier of Internet video.
Some are finding that the reality is not that simple.
Just ask Bill Mitchell, a 40-year-old engineer in Winston-Salem, N.C. He canceled his Time Warner cable service and connected his flat-panel television to the Internet to watch sitcoms and his other favorite shows, using products from Apple and Boxee.
His experiment lasted 12 months. Recently, grudgingly, he returned to his $130-a-month cable subscription, partly because his family wanted programming that was not available online.
“The problem is, we’re hooked on shows on HBO and Showtime, like ‘True Blood’ and ‘Dexter,’ ” he said, adding that he wishes he could buy only the shows he wants instead of big bundles of channels he doesn’t. “It’s so frustrating.”
These are confusing times in the living room. The proliferation of Internet video has led to much talk of “cord-cutting” — a term that has come to mean canceling traditional pay TV and replacing it with programming from a grab bag of online sources.
But so far Americans are not doing this in any meaningful numbers. “Nor is there any evidence of it emerging in the near future,” said Bruce Leichtman, the president of Leichtman Research Group, which studies consumer media habits.
This is all the more remarkable, industry analysts say, because it seems to defy the way the Internet has disrupted and challenged virtually every other major form of media — from music to newspapers to books.
In part that is because the television business took action to avoid the same fate. Heavyweight distributors and producers have protected their business models by ensuring that some must-see shows and live sporting events cannot legally be seen online.
Technology companies are pushing alternatives like Web-connected set-top boxes. But these are still not as easy as signing up for cable or satellite service, particularly for those who want to watch on a big flat-screen TV and not a computer.
And so, in the battle for the living room, 2010 seems to be the year that the incumbent is strengthening its foothold.
A New York Times/CBS News poll this month found that 88 percent of respondents paid for traditional TV service. Just 15 percent of those subscribers had considered replacing it with Internet video services like Hulu and YouTube.
Younger people, though, are more intrigued by the possibility: respondents under the age of 45 were significantly more likely than older ones to say they had considered replacing their pay TV service. The poll was conducted Aug. 3-5 with 847 respondents and has a margin of sampling error of plus or minus three percentage points.
Even through the downturn, the number of people subscribing to pay TV continued to grow. Cable, satellite and fiber-optic providers added 677,000 customers in the first quarter of this year, according to the investment firm Sanford C. Bernstein.
