Pay TV Service Numbers Wane, Internet Provides Competition
- by Wayne Friedman , September 2, 2014
About 85% of U.S. households have some form of pay TV service -- a percentage that has slipped over the last four years. Leichtman Research Group says “penetration of pay-TV among residential
households has waned from its peak in 2010 following the digital transition.”
Given the growth of overall U.S. household units, the number of pay TV subscribers is basically flat over the last four years. For the upcoming 2014-2015 season, Nielsen says there are 116.4 million U.S. TV homes -- a 0.5% gain versus the previous season. The U.S. Census Bureau say that in 2010 there were 132.8 million housing units.
Leichtman says among TV households that do not currently subscribe to a pay-TV service, 6% plan to subscribe to a pay-TV service in the next six months. Some 20% of TV homes subscribed to a pay TV service in the past year; 2% subscribed over one year ago; and 4% never subscribed.
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Household income is a factor in buying a pay TV service: 22% of TV homes with annual incomes of less than $50,000 are non-subscribers, compared to 13% with incomes more than $50,000.
Average monthly spending on a pay-TV service is $89.78 -- 36% less than in 2009. Twenty-two percent of those who moved in the past year do not currently subscribe to a pay-TV service -- a higher level than in previous years. Twelve percent of cable TV subscribers, 12% of telco TV subscribers and 11% of satellite TV subscribers are likely to switch from their current provider in the next six months.
Nearly the same percentage of non-subscribers point to the Internet and Netflix as the main reason for not currently subscribing to a pay-TV service -- compared to 3% in 2009.
So Nielsen's multichannel penetration numbers are wrong? Are they not still reporting over 90% total multichannel homes, by combining telco plus satellite plus cable?
This survey is based on a telephone sampling of only 1260 homes so it's rather a stretch to take its findings in minute or "granular" detail and compare them with previous studies done in the same manner, let alone with Nielsen's panel, which is many times larger. Also, one must also bear in mind that human respondents answering for the entire household, may give erroneous replies---or not fully understand the definition of being a "pay TV subscriber".