With an annualized budget of $9.9 billion and a whopping $10.5 billion in viewership, the U.S. cable and satellite TV market has been steadily gaining traction over the last several years.
With a huge chunk of that audience now streaming on a non-traditional pay TV service, those channels have been the primary target of cable and broadcast media companies like Comcast and AT&T.
In a new report, Netflix CEO Reed Hastings has called out the pay TV providers for failing to deliver the services that viewers are craving.
In the latest edition of The HuffingtonPost’s pay TV guide, Hastings says the biggest threat to cable and television operators like Comcast, which currently owns most of the market, is a shift away from traditional pay TV services that are dominated by news and entertainment.
Hastings’ comments come as the industry has seen the number of channels reach saturation points.
He says he is personally disappointed by how many people are abandoning traditional pay-TV subscriptions and opting to stream their favorite channels on a new platform called Netflix, a service that does not require any of the traditional channels to pay for access.
Hs comments come just days after Netflix announced that it would be adding a new, subscription-based service, called Netflix Now, that offers a much smaller selection of channels.
Netflix’s new service is expected to start in the second quarter.
But Hastings’ comments don’t exactly sit well with the majority of cable subscribers who have been opting to use a new streaming service that has a higher cost per month.
“We’re seeing a shift toward the old model,” Hastings said in the report.
“We’ve seen a lot of people that are trying to live in the future with an on-demand TV service.”
Hs assertion that consumers are abandoning the traditional pay channels comes at a time when cable and digital video providers are already in the middle of a massive transition.
The majority of the pay-tv market has already transitioned from an on demand model to a pay-per-view model, with a majority of pay-for-view channels now being exclusively on pay TV.
And while the majority is still viewing traditional pay television, the cable companies have started to see a huge increase in viewers switching over to streaming platforms, especially in the last few years.
In addition to Netflix, other companies like Amazon Prime Video and Hulu are also looking to move away from paying for an on view subscription model.
Netflix is expected have a much bigger presence in the U, Hastings said.
That’s especially true given the fact that most people still have an on line subscription to a cable or satellite TV service.
Hastings added that Netflix’s streaming service will eventually be “just a lot more robust than it currently is.”