Lower-Income Households Less Likely to Subscribe to Pay-TV Services

August 13, 2013

This article is included in these additional categories:

Broadcast & Cable | Household Income | Television

LRG-TV-Homes-Multi-Channel-Video-Aug201386% of TV households in the US subscribe to some type of multi-channel video service, according to new research from Leichtman Research Group, a figure in line with recent estimates from Digital TV Research, but higher than figures from GfK. However, there’s a big gap when sorting by household income: TV households with annual incomes less than $50,000 are more than twice as likely to forgo a subscription than those with incomes greater than $50,000 (20% vs. 9%). That implies that cost plays a significant role, a theory supported by a recent study from pivot.

Not only are higher-income households more likely to subscribe to a multi-channel video service, they’re also more likely to spend on it. Subscribers with household income (HHI) of greater than $50,000 spent on average 18% more per month than subscribers below that income threshold.

Among the 14% of TV households not subscribing to a service, 42% subscribe to at least one of the 3 major over-the-top (OTT) services. 40% subscribe to Netflix, 11% to Amazon Prime, and 7% to Hulu Plus.

Overall, that means that 8% of all TV households watch over-the-air (OTA) broadcast TV only, which is down from 10% in 2010, while 6% watch a combination of OTA and OTT.

For cord-cutting data enthusiasts, there are some further findings of note:

  • 10% of non-subscribers had subscribed to a service in the past year;
  • Given that 14% of TV households are non-subscribers, that translates to 1.4% of all TV households discontinuing their multi-channel video service at some point in the past year (recent estimates put cord-cutting at 1.1% of all pay-TV subscribers);
  • 5% of current subscribers did not subscribe at some point in the previous 2 years, and 7% of current non-subscribers plan to subscribe to a service in the following 6 months.

About the Data: The data is based on a survey of 1,319 households throughout the US.

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