Consumers Dropping Pay TV Services

mr weather said:

The point is the vast majority of tv watchers don't watch tv using their computers.

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The vast majority don't but at the margin there are some people who only watch TV on their computers. The vast majority of people still have fixed line teleophone lines but enough people are moving away from them to be a major threat to the Incumbent phone companies.

Also don't forget that there are more and more devices allowing to to watch computer video files or stream video over the internet on your TV even if you don't have an HTPC. First among these would be the Xbox360 and PS3 - also very popular with the under 30 set. Then there are tons of devices live the Popcorn Hour, WDTV Live, Sage HD Theater, etc that are inexpensive boxes that let you get content from your PC (or the internet) to your TV.

I am a quarter century removed from my university days but I would bet that a university student, particularly one living in a dorm, may use a PC for pretty much all media and communications. In other words, they won't be getting a phone line, since they can use their cell phone and Skype or other internet phone services, nor will they subscribe to cable since they have a good internet connection and will use their PC as a TV. They may become used to this and not bother subscribing to cable when they move out of the dorm and into off-campus housing. And once they are out of school they will have become so used to this that they don't bother with cable or fixed line phones at that time either.

You can easilly purchase an Acer Revo, Dell Zino, Mac Mini, Apple TV, etc, connect it to a TV, have it automatically download new episodes of your favourite show through torrents or newsgroups and then use XBMC, Boxee or Plex with a beautiful interface to catalogue and index your Movies and TV shows and even download synopses of each show or movie. Not to mention that these programs also allow you to stream from individual network sites or Hulu right to the box and right to your TV.

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... And the best thing is that you can easily turn any modern-day PC into a full-fledged DVR, by simply adding a TV tuner card. Windows Media Center 7 is undoubtedly the best DVR software available today, superior to Tivo and the likes, and including TV tuner support that lacks from XBMC, Boxee etc. Free program guides (unlike Tivo), artwork for TV programs, live TV recording, recording of individual shows or entire series, a smooth, professionally designed user interface with subtle animations, a rich set of playback controls for any type of video and recorded TV etc. Besides it is a true media center application, offering OTA radio and Internet radio, access to locally stored movies, music and photo libraries, games, etc.

... And it comes with Windows 7 at no additional cost. With the PC connected to a TV via HDMI, I see esp. the younger, tech-savvy generation adopting this as an easy, convenient approach to watching TV. Once set up, it's as simple as turning on your cable set-top box and TV, albeit delivering a vastly superior entertainment experience. See the commercials Microsoft is currently putting out there for Media Center. For once, they do not overstate the value of a product of theirs.

goforit asked: "But isn't the PQ better via OTA than the Internet?"

It depends on the service and your connection speed. I have an internet enabled TV and regularly watch online content from Netflix and VUDU. I have a 15mbs fibre pipe, so speed isn't an issue (normally).
Netflix looks pretty good when I view HD programs. It's not as good as an OTA HD picture, but it's acceptable. Non HD programs on Netflix vary, mostly it's roughly DVD quality.
VUDU is very good. I watch my movies in "HDX", which is 1080p. This is Blue Ray quality. The sound is very good, alothough I do not have a surround system to truly test the sound. I've used VUDU on a 1mbs connection and I could watch it SD quality, and even that was equal to or better than DVD.
I think, especially with products like Google TV right around the corner, online streaming services and devices will become far more mainstream and may even replace DVRs. Why pay a subscription for a device with limited storage where you must set it to record a show, then when you watch the show you have to fast forward through the advertisments? Plus, there's a hard drive in there that will fail when you least expect it.