Several months ago, I received notice from my pay TV provider showing new rates for 2011. To my shock, some of the rates were actually down. That’s probably because people are dialing back on their pay TV service for the first time since the industry’s beginnings.
A new Forrester Research study shows the time we spend online is — no surprise here — way up over the last 5 years. The younger you are, the more likely you are to be online. But listen to this: The time spent watching video has not declined. And that’s the rub for the pay TV providers.
For example, I will sit with my laptop and web surf while I watch my beloved NFL football. There’s a lot of stopping in the action during the games, and sometimes I get so engrossed in the web that I have to use my remote controller to back up the program so that I can catch a play I missed.
Recently my wife and I had the good fortune of picking up a bug and we were together in bed. What did we do? We watched 3 different movies on Netflix on her iPad. We were still watching video, but we were not using pay TV.
I want you to think about the idea of reducing what you’re spending on pay TV this year. I’m not asking you to cut the cord, but I am asking you to dial back your programming package and also to bargain. Play the different pay TV providers against each other and make them fight for your business. And think through the question of whether you really need that premium movie package. I say, “No way!” Try spending $8/month on Netflix instead and get rid of that premium movie package.
Editor’s note: This segment originally aired January 2011.