About 3.74 million (3.7 percent) U.S. subscription video service subscribers cut their TV subscriptions 2008 2012 to rely solely on alternative viewing options, including Netflix and other online alternatives, in 2012.
Convergence Consulting Group also forecasts that U.S. TV cord cutter households will reach 4.7 million (4.7 percent of total households) by year-end 2013. For some, that means cord cutting is a modest problem.
Others might argue the bigger immediate problem is “cord avoiders ” namely people who can afford a video subscription but do not find the product relevant.
Credit Suisse analysts who said they remain optimistic on cable and satellite entertainment businesses nevertheless see the developing new problem as "cord-avoiders," households that are relying on video alternatives in an arguably new way.
Many new households simply are not signing up for cable or satellite, the analysts said. While there were 1.8 million households formed, according to U.S. Census estimates cited by the report, only 16.9 percent of them signed up for video entertainment services.
A reasonable way to describe the trend is to say that the audience for free online full-episode TV (not Hulu Plus, iTunes, Netflix, or walled garden requiring a paid subscription) has slightly declined, says Convergence Consulting Group. The audience using subscription TV services has not fallen off a cliff.
Nor is it so clear that the abandonment rate has even accelerated. In fact, service providers still are adding net new subscribers.
Nor is it so clear that the abandonment rate has even accelerated. In fact, service providers still are adding net new subscribers.
Convergence Consulting Group estimates 31,000 U.S. TV subscribers were added in 2012,
down from 112,000 in 2011, and forecasts 98,000 net video service subscriber additions for 2013.
Over the 2004 to 2009 period, annual U.S. subscription TV net additions averaged 1.86 million. So it would be fair to say that the video subscription market is close to full saturation, a condition that is not necessarily directly linked to video abandonment, but is linked at some level, based on growing consumer resistance to price hikes.
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