Hollywood's traditional media players are facing an unprecedented challenge to their business model as "cord-cutters" opt to cancel their expensive cable subscriptions in favor of on-demand streaming services. While pay-TV providers continue to charge well in excess of $50 a month for the top packages, Netflix, Hulu and Amazon are serving up an ever-growing menu of acclaimed original content for the price of a cheap bottle of wine. Cable may still be king when it comes to the breadth of choice, but streaming on-demand video (SVOD) hits like "House of Cards" and "Orange is the New Black," with 49 Emmy nominations between them, are competing on quality.
Earlier this month California-based payment service provider Vindicia published the results of a survey of 1,000 American adults who had at least one paid subscription service. Some 45 percent of respondents cited "over-the-top" (OTT) video services such as HBO Now, Netflix and Hulu as most important to them. Crucially, more than half of the key "millennial" generation -- those in their 20s and 30s ardently courted by the advertisers -- said they used SVOD.
Research by global media consultancy LEK published in January showed a similar pattern in Britain, where the majority of millennials expecting to get OTT in the next year were planning to cancel or reduce their pay-TV spending. The revolution isn't confined to television, with the shift towards an on-demand world redefining the way we access services in many other aspects of our lives. In the 2015 edition of its influential "Internet Trends" report, venture capitalist firm Kleiner, Perkins, Caufield and Byers noted the increasing popularity among millennials of apps like Uber, Airbnb and Instacart.
Every innovation in home entertainment -- from the introduction of video and then DVDs to high speed 4G broadband -- has been accompanied by shrill predictions of the death of cinema. Yet US audiences have been roughly stable over 50 years, while North American box office takings have remained between $10 billion and $11 billion since 2009.
