Broadband becoming an alternative to traditional paid TV?

By February 10, 2012 1 comment
Keywords : Smart city, America
television and content floating

As US consumers weight the different video access categories available to them, new patterns are emerging. Most still pay for TV content, but some are skipping cable and getting fast Internet instead.



Consumers viewing habits are changing rapidly, with viewing patterns shifting across TV, Internet and video. Many viewers are subscribing to broadband and cutting traditional paid TV - there are currently 5.1 million broadcast-only and broadband homes, which increased 22.8 percent last year. Even though nine-tenths of all TV households still pay for content, this trend may be the most significant since it reflects broadcast-only homes upgrading to broadband, and more households cut the cord of their paid-TV subscription. At 4.5 percent, broadcast only/broadband homes represent a small section of the population, but are rapidly growing, and have unique video viewing habits. They stream video about twice as much as all cross-platform groups and watch about half as much TV.

With connected devices come new viewing habits

From Q3 2008 to Q3 2011, the number of people watching video on the Internet has risen 21.7 percent, and the time that they spent increased 79.5 percent. Users who watch timeshifted TV rose 65.9 percent and time rose 66.1 percent. Mobile phone video viewers increased by 205.7 percent and time rose among them by 19.8 percent. This three year arc shows just how drastically video watching has changed since Nielsen’s Cross-Platform Report began. In this same year, the amount of time that people spend across screens has risen - 7.1 percent for Internet video, 13.8 percent on timeshifting TV, and 36.9 percent on mobile video. Internet, timeshift and mobile video are all relative newcomers that are still altering the video-on-demand landscape as they reach what may be a stable penetration level.

Broadband compliments and sometimes replaces pay TV subscriptions

Whether broadband connection is becoming an alternative to pay TV or whether it is actually creating new usage patterns is a complex question. However, the Nielsen study shows the amount of broadcast-only and broadband households have risen 22.8 percent and cable TV and no broadband Internet households have fallen 17.1 percent. In other words, more households are getting broadband, including those already paying for cable or satellite. Fast Internet speeds are giving households without previous paid TV content access to new usage patterns, and it is also giving a small number of previous cable or other premium TV content subscribers the option of cutting the cord on one of their expenses.

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1 Comment

I just realized that when Nielsen gives their statistics, they are using two different comparisons. Pay TV is being compared to itself in some studies, whereas in others all TV watchers are included. I can see where the overall DVR use may not seem like it is increasing overall among all TV watchers, but for those who kept their pay TV service, the percentage has increased more dramatically. I know my employer, DISH is expecting to see a lot more DVR users now that they aren’t charging up front costs for the Hopper whole-home DVR for new customers that qualify. In fact, I DVR everything I watch any more, except for live sports and news. That makes it easier to do my thing and not miss my shows. Having 250 hours of HD recording space on the Hopper will be nice too when they install mine in a few weeks. Perhaps time shifting creates unique problems for the TV industry, but the pay TV customers really like it.

Submitted by Gman (not verified) - on March 17, 2012 at 07:19 pm

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