The percentage of American pay TV subscribers cutting the cord is low, but the numbers are gradually rising, says Convergence Consulting Group [pdf] in an April 2012 report. Using its proprietary cord cutting model, which takes into account economic conditions, annual subscriber additions, and digital transition, the company estimates that 2.6% of US TV subscribers, or 2.65 million subscribers, cut the cord between 2008 and 2011 to rely solely on online, Netflix, and other sources. This includes 1% (1.05 million) who did so just last year. Additionally, Convergence forecasts another 0.93 million subscribers to cut the cord this year, to reach 3.6% (3.58 million) between 2008 and 2012.
The Convergence estimates are lower than survey results released in January 2012 by Deloitte, which found that 9% of Americans have cut their pay TV connection because they can watch all their favorite shows online, while a further 11% are considering doing so.
Looking at the US movie and TV rental market, Convergence estimates that mail represented one-quarter of total revenue in 2011, followed by VOD (cable, satellite, telco TV – 21%), store (20%), and Kosks (19%). Online subscriptions (Hulu Plus & Netflix) accounted for 13% share. For this year, though, online subscriptions are predicted to almost double to 25% share, while Kiosk revenues will rise to 22% share. Offsetting these growing revenue streams will be store, predicted to drop to 13% share, and mail, forecast to drop to 16% share. VOD will remain constant at 21% share.
Data from a Digitas survey released in April 2012 indicates that many consumers want TV shows to offer them the opportunity to watch content on another screen. In fact, 58% of respondents with a favorite TV show said that if that program posted exclusive videos online, they would watch those videos.
Brands can benefit from engaging these online viewers, too: 51% of online video viewers aged 18-44 said they would look up a new brand or product if it was mentioned in a video they were watching online. Almost 2 in 5 respondents aged over 55 said they would do the same, with women more likely than men (44% vs. 34%).
Results from the Digitas survey also show that more than 3 in 5 US adults have browsed through online content while watching TV, a proportion that rises to 71% among 18-44-year-olds. Slightly more than one-quarter of US adults have looked at content related to the show they were watching, although a significantly higher proportion (48%) browsed unrelated content.
This behavior is especially prominent among device owners, finds Nielsen in April 2012 analysis of a Q4 2011 survey of connected device owners in the US. 88% of tablet owners and 86% of smartphone owners reported using their device while watching TV at least once during a 30-day period. This was not a random occurrence, either: 47% of tablet owners and 41% of smartphone owners said they used their device at least daily while watching TV.
About the Data: The Digitas survey was conducted online within the US by Harris Interactive on behalf of Digitas from March 22-26, 2012 among 2,211 US adults age 18 years and older.
Topics: Analytics & Automated, Boomers & Older, Brand Metrics, Cable, Financial Services, Media & Entertainment, Men, Network, Social Media, Spot, Technology, Telecom, Television, Traditional, Women, Youth & Gen X
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