Downgrade: Broadband Adoption Linked To TV Cord-Cutting
More consumers with cable, satellite or telco TV services have downgraded their services in the last year -- and more are on the way.
Dallas-based researcher Parks Associates says 13% of consumers who have broadband connections have made cutbacks within the last 12 months -- with another 9% to come. The study says this includes some 3.9 million people who regularly watch Internet video.
These "downgraders" or "cord shavers," who typically spend $20 or less on monthly video services, are heavy TV users. They watch, on average, 4.2 hours of Internet video on their TV each week. Parks Associates says the growth of downgraders is more closely linked to the growth of broadband adoption than watching more Internet video.
It recommends that providers of pay TV improve their video on demand selections -- especially to compete with Netflix and Redbox.
The study says 22% of all broadband households now use the Netflix Watch Instantly service. It was also suggested that set-top box distributors find a way to include YouTube, the digital video service, which is already being included in many Internet-connected TVs on the market.
The reports says "TV Everywhere will be an ineffective retention tool." The data suggests that 11% of all pay-TV households, or 6.5 million homes, would pay an extra $15 a month. Many consumers view TV Everywhere as a "premium package."
The study suggests that "TV Everywhere" providers will see gains if many offer no-frill packages.
Park Associates notes that nearly 50% of all flat-panel TVs sold in 2011 will be Internet-connectable and about two-thirds of U.S. broadband households will have a video-game console connected to the Internet. Consumer sales of Internet-connectable TV devices will climb to nearly 350 million units worldwide by 2015.
In terms of overall pay TV provider, the study ranked DirecTV the highest in overall TV viewing experience satisfaction, and AT&T in second place.