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Many households cutting cable, but not their favorite TV shows

Ruby McElhenny, 5, spent some “screen time” watching “My Little Pony” on an iPhone.

Yoon S. Byun/Globe Staff

Ruby McElhenny, 5, spent some “screen time” watching “My Little Pony” on an iPhone.

Tucked above the television in their living room, the cable box in the McElhennys’ Gloucester home is often little more than a paperweight, a memento of an era when consumers were tethered to their sets and the cable or satellite providers that dictated their entertainment choices.

They often like to watch their favorite shows on their laptops, and when they do turn to the TV, they bypass their cable provider, Comcast, and watch video over a Web-streaming device from Roku. Meanwhile their two small children spend weekend “screen time” on an iPhone or Kindle Fire tablet.

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“I am constantly on the brink of canceling the whole cable thing,” Aria McElhenny said. “We really don’t use it.”

The McElhennys are among a growing number of American families who are increasingly using Internet-based services to watch their favorites when they want and where they want, and in the process reducing or bypassing cable or satellite television.

Though enabled by a more robust Internet and sophisticated mobile devices, the driving force behind this shift is as much cultural as it is technological: Consumers such as the McElhennys are balking at the complicated packages offered by their cable or satellite providers and at paying for channels they don’t watch or services they don’t need, and now finally have more convenient and less expensive options.

“Consumers now have more control over their viewing habits than ever before,” said Mike McGuire, an analyst at technology research firm Gartner Inc.

Yoon S. Byun/Globe Staff

John and Aria McElhenny, shown with their children Luke and Ruby, cut their cable bill by using Hulu and Netflix.

Services such as Hulu, Netflix, Apple’s iTunes, and YouTube allow consumers to essentially narrowcast their own entertainment channels, often paying less in the process.

‘I am constantly on the brink of canceling the whole cable thing.’

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“We are starting to see the great unbundling of the pay TV business,” McGuire said, as “people are awakening to the capabilities that these technologies provide, and are jumping on them with both feet.”

Just this week another new option debuted in Boston. Aereo Inc. is rolling out its service that allows consumers to watch broadcast television shows on tablets, smartphones, and computers, for $8 a month. The Aereo service is only for shows broadcast “over the airwaves,” such as “American Idol” or “Modern Family,” not for those delivered solely by cable or satellite, such as “Mad Men.”

Between 2008 and 2012 some 3.74 million Americans cut their cable, satellite, and other paid subscriptions to use Web-streaming sites or over-the-air service, and the number is growing, according to Convergence Consulting Group , which monitors viewing habits. What’s more, the firm found, pay television services added only 31,000 new subscribers last year, down from 112,000 the year before.

A separate study by Deloitte found that 21 percent of Americans are now using some kind of free online video service on a regular basis.

And then there are the “digital natives,” a whole generation of younger viewers who grew up watching much of their media over the Web and for whom cable or satellite is as much a relic as a landline phone.

When Alley Stoetzel, 27, recently moved into her Newton apartment she opted not to get a television at all, and instead watches “The Colbert Report” and “The Walking Dead” and other shows on her MacBook.

“I just found that I didn’t really want one,” Stoetzel said. “I bought a toaster instead.”

The rise of mobile devices such as tablets is accelerating this trend. According to the research firm Parks Associates, Americans now spend 1.7 hours a week watching video on smartphones and 8.2 hours on computers; meanwhile, traditional TV viewing is declining, to 18.9 hours a week, compared with 20.4 hours a year ago.

“Because consumers are able to get content when they want it, how they want it, they are filling time on other platforms,” said Brett Sappington, a digital media analyst at Parks.

To be sure, viewers such as Stoetzel are still in a minority. An estimated 100.5 million households — 81 percent of all US households — paid for some kind of cable, satellite, or telecom television subscription service in 2012, according to Convergence Consulting.

And Comcast said it has not seen any meaningful erosion of its customer base, according to spokesman Marc Goodman. In fact, he said Comcast revenues from video services grew 3.7 percent in the first quarter to $5.1 billion, though during that period Comcast did raise rates.

That said, Comcast, Verizon, and other providers are trying to accommodate consumers with more convenient viewing options, such as being able to watch some shows on mobile devices and over the Web.

Verizon said it is offering new ways for customers to access video over the Internet and on mobile devices. The typical Verizon customer has seven Internet-connected devices in the household, said Maitreyi Krishnaswamy, director of product development for Verizon’s high-speed FiOS service.

“The definition of video access has changed dramatically,” she said. “The end-users ultimately have a lot more choice.”

But the upstart Web-only companies insist their services have a major advantage over the big legacy providers: They’re much easier to understand and buy, compared with elaborate bundles offered by cable or satellite providers that can include terms that make it difficult to switch or drop.

“Consumers want simple. They don’t want to deal with too many rules and restrictions,” said Chet Kanojia, chief executive of Aereo.

The implications of these trends are huge for both broadcasters and service providers, and the established players in the video entertainment industry are facing a fundamental shift to their business model much as the music industry did more than a decade ago.

In the case of Aereo, for example, the service is encountering opposition from broadcasters. It is being sued on the grounds it is taking their content without paying.

Meanwhile consumers’ pent-up frustrations over their cable or satellite service has surfaced in Congress, where Senator John McCain of Arizona this week testified on his plan to let consumers buy service on a per channel, or a la carte, basis. McCain said one reason for his bill, which he calls the Television Consumer Freedom Act, was the rising cost of cable: now an average of $54 a month, from $25 in 1995.

To contain their cable bill, the McElhennys switched to the lowest possible Comcast cable TV option and subscribed to Hulu and Netflix. Their monthly video viewing now costs under $30, compared with a $60 package from Comcast.

Moreover, the solution proposed by McCain may help solve one of the shortcomings consumers face when they take more control of their entertainment choices: that they can’t get everything they want.

Indeed, after giving up the cable package that included broadcasts of Red Sox games, John McElhenny said he has been unable to find another way to watch his team.

“That’s the one trade off with all of this,” he said. “That Tuesday night Red Sox game is what I miss.”

Michael Farrell can be reached at michael.farrell@globe.com.
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