23% Rise in Broadband-Only Homes? Hold On, Cord-Cutting Prognosticators - We're Not There Yet

• Comment (3)
• Recommend (5)
• Tweet
• 

Is she or isn’t she? The question used to be posed about a woman’s hair color.

And now, I ask the question of TV viewing: are we or aren’t we cutting the cord?

Nielsen just released its newest cross-platform report for the third quarter of 2011, which found the number of Internet-only homes jumped 23% year–over-year.

But when it comes to stats, you can’t just look at the hair color; you have to look at the roots (why yes, that’s how you overreach on a metaphor!). Here’s why — Nielsen found that there are 5.1 million broadcast only/broadband homes, meaning they have Internet connectivity but not cable TV services, compared to nearly 81 million homes with cable channels. The Internet-only homes are the smallest group, but they are growing the fastest of any group of TV viewers, by nearly 23%. Nielsen also found that new media viewing is way up since it started this three-screen report in 2008. Specifically, the number of users watching Web video is up nearly 22% and the time spent watching online video is up about 80% over that time.

It can be tempting to conclude more consumers are ditching their cable TV service for Web viewing. Not so fast. Nielsen points out that these broadband-only homes may be homes that never subscribed to cable or broadband before rather than homes that are cutting back. Bruce Leichtman of Leichtman Research Group said research indicates that overall TV viewing has grown in the last year. “Even among this group of light TV viewers, the Nielsen data shows that they watch 10X the TV to streaming – compared to 50X overall,” he said. Plus, any loss in cable subscribers has been offset by consumers shifting to telephone or satellite providers for their multichannel viewing.

Nielsen found the same. “The number of homes subscribing to wired cable has decreased 4.1 percent in the past year at the same time that telephone company-provided (telco) and satellite TV have seen increases of 21.1 percent and 2.1 percent, respectively,” Nielsen said.

Boy, do we Americans watch a lot of TV.

Here’s the bottom line - we’re not there yet when it comes to cord-cutting. But keep an eye on how these broadband-only homes evolve.

• Comment (3)
• Recommend (5)
• Tweet
• 

3 comments on "23% Rise in Broadband-Only Homes? Hold On, Cord-Cutting Prognosticators - We're Not There Yet".

1. Doug Garnett from Atomic Direct
   

   commented on: February 13, 2012 at 1:46 p.m.
   Good analysis. And, we should also note that given the relatively tiny number of these homes, an increase of 23% is miniscule. There will be a significant movement only when the rate of increase reaches 100% to 300% year over year.
2. Douglas Ferguson from College of Charleston
   

   commented on: February 13, 2012 at 3:53 p.m.
   Good, but incredibly short-term view. The underlying premise is, look how tiny appears the sliver of disruptive audience members. So small. But the same was said of DVR/TiVo homes in 2001. Only 3 percent, no big deal. Today, decade later, DVR penetration hovers at 45-50%, well past the tipping point for disruption. If you've ever fought crabgrass, you know how disruptive a teeny-tiny patch of weeds can overtake your yard.
3. Doug Garnett from Atomic Direct
   

   commented on: February 13, 2012 at 5:53 p.m.
   @Douglas - what interests me in your example is that DVRs have fully arrived. (Although I'm skeptical of your statistics. Last I checked it was stuck at about 30% but maybe I've missed a study or two.) Yes, with significant penetration none of their downside has arrived. At this point, in a fully DVR world, advertising appears to have increased in effectiveness - probably because we skip the ads that are meaningless and can actually stop and watch the ones that matter. However, I do believe that it's going to take a major advantage ins quality of programming experience before this trickle becomes a trend. In fact, DVRs show this to us. They were initially sold as "rewind live TV" - and sales were miserable. Only as people discovered significant added viewing value (time delay viewing) did their sales finally increase. Checking out a few YouTube videos is far from enough to shift viewing.

Leave a Comment