Sony is shutting down its online-cable alternative, PlayStation Vue, citing the high cost of content and the difficulty of reaching deals with networks.
It did not release how many customers Vue had, but it was seen as a small player. Vue will shut down in January.
Sony started Vue in early 2015 as a cheaper version of cable TV delivered via the internet. It was a test case for a TV alternative, alongside Dish’s Sling TV and, later, a slew of copycats from DirecTV, Google, Hulu and others.
These services were initially heralded as the future of TV as more cable customers began cutting the cord. They offered popular TV networks for less than the cost of a cable package. Signing up and canceling were easy, with no need for installation.
But customer growth has slowed and even dropped for many of these services as prices rose and they added more channels, coming closer to their traditional TV counterparts. AT&T’s version, AT&T TV Now, formerly known as DirecTV Now, has dropped customers for four straight quarters, losing more than 700,000 subscribers as it rolled off deep discounts.
The market for these alternative services is about 8.4 million subscribers, according to the research firm MoffettNathanson. By comparison, there are about 86 million traditional TV households in the United States.
“The market is due for a shakeout,” Craig Moffett, a partner at MoffettNathanson, said of the cheaper cable substitutes. When they raised prices, customers left. “It was a Catch-22 from the beginning. They were unrealistically priced.”
The industry’s latest hope for a successor to cable or satellite TV has shifted to streaming services, including Netflix and new entries from AT&T, Comcast and Disney. Apple’s version starts Friday.
Increasing competition from those services will put more pressure on the online-cable services, said Jeffrey Wlodarczak, an analyst at Pivotal Research.
“The only way to innovate in pay TV is to try to follow Netflix,” Mr. Wlodarczak said. “You can’t innovate in pay TV. It’s too firmly ensconced.”