What ‘House of Cards’ means for the future of television

Are streaming video services like Netflix a threat to pay TV?

Netflix released the second season of the popular "House of Cards" at midnight on Thursday.

Frank Underwood is back, and he’s out for blood.

For several weeks, Netflix’s wildly popular political drama "House of Cards" has been an omnipresent topic on social media.

Even the man occupying the most powerful post in politics has succumbed to the crafty back-door dealings of the Underwoods.

"House of Cards: No spoilers please," President Barack Obama’s Twitter account read just hours before the show's release on midnight Thursday.

"House of Cards" has been a boon for the streaming video company, and Netflix has found even more success with “Orange Is the New Black,” another piece of original content. Netflix closed out the fourth quarter 2013 with more than 40 million subscribers, more than any of the big cable companies.

The rise of Netflix and streaming video has led to a drastic change in TV viewing habits. More than 60 percent of Americans, according to a 2013 Nielsen survey, admitted to binge-watching shows, and nearly eight in 10 Americans have used technology to watch their favorite shows on their own schedule.

This, says Matt Locke, director of the cross-platform media company Story Things, puts pay-TV companies like Comcast and Time Warner Cable in a tight spot. People’s viewing patterns have permanently shifted, he told Al Jazeera.

"What we’re seeing actually is the breakup around traditional broadcasting models around genres as much as anything else," he said.

Consumers want the ability to fully immerse themselves in a drama or comedy series when they have the time. The practice is better known as "binge-watching," something web TV services encourage viewers to do when they make whole seasons of a show available at once.

Locke, who has a long history of work in the television industry for Britain’s BBC and Channel 4, said people’s viewing habits are gradually changing from "appointment-viewing TV" — watching one episode of a certain show on a certain day at a certain time — to the more convenient and user controlled video-on-demand.

There are more ways to distribute content than ever, Locke says, giving content creators more choices and the potential for a much bigger audience.

"You used to have to plan around a TV broadcasters schedule because that was the only way to reach millions of people." Now with Netflix, YouTube, Hulu and others, the door is wide open.

But are streaming video services really the threat to pay TV that analysts are clamoring about?

A 2010 Pew Research study found that fewer than 1 percent of cable subscribers had opted to go online-only over a three-month period, signaling that the worry over cord-cutting may be a bit premature.

Still, the study said cord-cutting could be a serious threat, but it “will not happen overnight.”

Day Rayburn, an expert in streaming and online video, is skeptical of the impact web-based TV platforms will have on the cable industry, and he says people are crying wolf.

"Cable is not dead or dying," Rayburn said.

"Netflix typically is not a replacement for pay TV services, it’s a complement to it. There definitely is a shift in terms of how content is being viewed, but the cable companies are moving with that," by offering new ways to watch TV outside of the home and other services.

Rayburn said that for all the hype surrounding web services like Netflix, Amazon Prime and Aereo, there isn’t much to be really excited about, and people really aren’t saving that much money by opting to leave their cable bundles and hobble together web services.

Rayburn said if he was just to pay a cable company for home phone and Internet, it would cost him about $70 a month, and he would still have to spend an additional $15 to add Hulu and Netflix to his monthly TV viewing. If there were a show he wanted to watch that the two services didn’t have, he’d have to spend another $3 an episode to rent it from the iTunes store.

When he compares that to his $100 monthly bill from Verizon, which bundles TV, Internet and phone services, he doesn’t see much of a difference.

By adding all these extra services, "now I’m up to 96 bucks, how much did I really save?”

Throw in issues of video quality, spotty service and a dependence on Wi-Fi, and it’s just not worth it Rayburn says.

Locke disagrees.

He says streaming web services like Netflix, Hulu and others are what the CD was to the music industry: a change agent.

"We’re about 10 years into a 30-year shift," Locke said.

"The CD turned 30 last year, and in many ways you can see the CD as a game changer, because it gave people the skip button, which gave the audience the ability to listen to their music in a way that was not controlled by the artists. In 30 years, you went from one behavior and having the audience to be able to skip songs and shuffle, to now having Spotify" and other streaming music services.

The real impact remains to be seen. "House of Cards" actor Kevin Spacey himself has jumped in to criticize the pay-TV industry, urging it to relinquish more control to viewers.

Locke has his money on shifting consumer habits forcing pay-TV companies to change their revenue models.

"It’s going to take another couple of decades to disrupt the current business models, but I would never bet against audiences changing the business models."

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