Showing posts with label video cord cutting. Show all posts
Showing posts with label video cord cutting. Show all posts

Saturday, September 17, 2011

IHS Screen Digest Does Think People are Substituting Online Video for Cable TV

The number of multichannel subscription TV households in the United States declined by nearly 380,000 in the second quarter of 2011 as traditional cable and satellite video providers continued to lose subscribers because of economic factors and lower-priced Internet video solutions, according to new IHS Screen Digest findings from information and analysis provider IHS.

The noteworthy angle here is that IHS does believe over-the-top online video is having an impact. Most observers say customers are "cutting the cord" to save money, or because they are not so interested in TV, but not specifically to watch online alternatives. IHS thinks the substitution is happening.

Total U.S. TV subscriptions in the second quarter—the latest time in which full figures are available— decreased to 100.9 million, down from 101.4 million in the first quarter.

Overall, the loss of approximately 378,000 households during the period was much greater than the increase of 345,000 seen in the fourth quarter of 2010. The decline also reversed much of the gains that occurred in the first quarter this year when some 461,000 subscriber households had signed on to new services. The last time a loss of this magnitude took place was a year ago in the second quarter of 2010, when the industry dropped approximately 249,000 subscribers.

Sunday, August 21, 2011

US TV Subscriptions Decline

IHS Screen Digest estimates there was a decline of approximately 364,000 pay TV households in the US over the second quarter of 2011. The significant decline was largely due to escalating losses for cable operators and anaemic subscriber growth on the part of satellite operators. IPTV operators posted strong subscriber growth of 386,000, but this was not enough to offset the declines in other platforms.

IHS Screen Digest forecasts quarterly declines will continue in the next few years. Unlike some other knowledgeable observers, IHS Screen Digest does think video cord cutting, in the form of a switch to Internet delivery, is happening.

"We need to take a hard look at the facts of the situation: the economic situation for a vast population of Americans has worsened in the past four years, and customers are discontinuing video service in favor of lower priced Internet video solutions," IHS Screen Digest says.

Ultimately IHS Screen Digest believes that content owners are in the most precarious position as they attempt to continue the nearly 10 per cent annual growth in cable affiliate fees enjoyed between the years of 2000 to 2010. As video ARPU passes $86 in 2015, can we expect consumers to bear the increases?

US pay TV subscriptions decline

Friday, January 28, 2011

Cord-Cutting is Too Difficult For Average Families

Here’s evidence that regular people have zero time for things like Google TV, Boxee, and Roku, if only because they’re too complicated.

Hill Holiday, an ad agency,” asked five Boston-area families to participate in a cord-cutting experiment. For one week each family was asked to forgo traditional cable TV in favor of one of the following devices: Apple TV, Google TV, Boxee Box, Xbox 360, and Roku.



As it turns out, TV watching still is a "lean back" activity, and the new Internet delivery systems changed that into an undesirable "lean forward" experience, to some extent. That isn't to say that some company, sometime, will "Apple-ize" the experience and make it elegant. But we aren't there yet.

Saturday, November 6, 2010

Video Entertainment Decline Seems Not to be a Blip

Much was made of a first-time-ever decline in multichannel video subscibers in the second quarter. So the big issue became "what will happen in the third quarter?"

Though all of the data is not available (some firms are private and do not have to report), it does appear that the second quarter decline was not a one-time anomaly.

Dish Network lost about 29,000 net subscribers during the third quarter of 2010. CableVision Systems Corp. lost 24,500 basic video subscriptions in the quarter. Comcast earlier reported a loss of 275,000 subscribers in the third quarter, while Time Warner Cable says it lost 155,000 video subscribers, representing a collective loss of 483,500 customers.

Verizon's FiOS TV service had an increase of 204,000 net new subscribers, while AT&T's U-Verse had an increase of 236,000 new video subscribers. That represents a gain of 440,000 subscribers. DirecTV added 174,000 net new U.S video customers. So telcos and DirecTV gained a net 614,000 net new customers.

Based on what happened with the major public companies, telcos and satellite companies (at least DirecTV) gained 130,500 more customers than the cable companies and Dish Network lost.

So here's an exercise to figure out what might have happened. Comcast, Time Warner Cable, Cox, Charter Communications and Cablevision Systems between them represent about 80 percent of all U.S. cable video customers.

Comcast and Time Warner represent 59 percent of all U.S. cable video customers. So asume every cable operator lost customers at the same rates as Comcast and Time Warner.

That would suggest overall cable industry losses at about 728,800 customers. If the telco and satellite competitors gained 614,000 net new customers, that leaves 115,000 customers who simply stopped buying.

But what that that means for the "video cord cuttting" thesis is unclear. We don't know whether the estimated 115,000 lost customers corresponds to reality. If the number is mostly correct, we don't know whether the change in behavior is permanent or temporary.

But it seems possible that the overall size of the U.S. multichannel video market is contracting at the moment. It seems to have done so for two quarters in a row, an unprecedented event. Whether that means a shift to over-the-top video consumption, a shift to over-the-air viewing or something else cannot yet be determined. Nor can we tell whether the behavior is temporary or permanent.

But the cord cutting thesis cannot be discounted. Up to this point consumers seem to have responded to tougher times by cutting back on premium services, pay per view and other ancillary services that have been driving cable video revenue growth. Over the last two quarters, consumers might be cutting even more than that, abandoning video service altogether and perhaps shifting scarce discretionary income to other services deemed more important, such as mobile or broadband services.

Thursday, September 30, 2010

20% of AMericans Have Reduced Spending on Cable?

In a short piece on how Americans are economizing during the recession, sponsored by the Harris Poll, brief mention was made of the fact that 20 percent of Americans have cut back someplace on their "cable" spending. If so, that would presumably include cutting back on HBO subscriptions, disconnecting an outlet and therefore saving a monthly cable decoder rental, or other actions that keep the basic cable subscription in place.

If true, though, such data would show the important role the economy, housing crisis and joblessness are having on fixed-line service providers. Significant percentages of people also claim they cut off a mobile phone subscription or fixed-line voice subscription as well.

What Americans say they gave up in 2009

Wednesday, September 15, 2010

13% of Multichannel Video Subs Might Cancel in Next 12 Months, Survey Finds

Some 13 percent of current multichannel video subscribers in the United States say they are "somewhat" or "very" likely to cancel their current subscription in the next twelve months, and not sign up with a competing provider, according to a survey of 2,000 US households recently conducted by Strategy Analytics.

“While it may represent only a relatively small percentage today, we anticipate the number of cord cutters to increase going forward,” says Ben Piper, Strategy Analytics director.

Younger Americans consume and value content in a way far different from their parents’ generation, and have little regard for how content is delivered, says Piper. That is undoubtedly true. What still remains unknown is the degree to which consumers will do what they say they will (often they do not).

The other unknown is the extent to which service providers will adapt by offering on-demand access to desired content, shoring up demand for the traditional product by requiring a traditional subscription in order to access the on-demand content.

The other angle is the extent to which younger users, who have grown up in households where somebody else pays the bill, and who initially do not subscribe (to save money) when founding their own households, might change their views as they progress in their careers and find "saving money" by not subscribing is not the big consideration it once was.

So far, online and mobile video seems to be supplemental, not a replacement for multichannel video services, for nearly everyone. The verifiable percentage of users who have had service and stopped using it seems to be somewhere less than three percent of households.

The percentage of all households that buy broadband access but not video service is in the three percent range or so, Nielsen says, for example. The issue there is that not every household that doesn't buy video service is a "cord cutter." Some newly-formed or temporary households do not buy video entertainment services, but are not, strictly speaking, "cord cutters."

They might never have bought multichannel video service before, but that is not always an indication they do not want the product, or will not buy it in the future. Also, there have always been some households that do not buy such services because they do not see the value, and three percent of households would not be at all unusual on that score.

The point is that actual levels of "video cord cutting" are rather insignificant at the moment, and barely different from "non-subscribing" video households overall.

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