There are a few potential reasons for the downward trend. The transition to digital TV. TV penetration first dipped after this transition and continued in 2010. Nielsen also says the cost of owning a TV is a factor. Lower-income and rural homes were particularly affected.
But new platforms might be having an affect as well. Nielsen data demonstrates that consumers are viewing more video content across all platforms.
However, a small subset of younger, urban consumers are going without paid TV subscriptions. The long-term effects of this are unclear. One might argue that the "no TV" behavior is temporary, reflecting a stage of life where discretionary income is more limited. Or, more disturbingly for some providers, younger consumers might value multichannel TV less than older age cohorts.
The issue is whether linear multichannel television is a product like any other, with a product lifecycle that now is past its peak, and starting to decline. It might once have seemed inconceivable that voice service was a normal product, with a lifecycle. But people have other communications alternatives, and some would say mobile voice is the preferred way of using voice communications.
The issue for the video entertainment ecosystem is whether a similar product lifecycle now is starting to assert itself in the TV business.
1 comment:
Some of the articles I read suggest there are some very practical reasons for why people have fewer TV’s in their home. I’m sure that those who have TV’s have more of them, while those that had one have none now. Nielson suggested that there are more impoverished people who couldn’t afford the digital conversion for one reason or another. Companies like AT& only give discounts on bundles which some can’t afford when they just want cheap TV, so they turn to companies like DISH that have 5 packages under $50.
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