Wireless TV Households Skyrocket in USA: Nielsen Reports 23 Per Cent Increase in Cord Cutting Homes

written by: Richard Kastelein

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Americans spend more than 33 hours per week watching video across the screens. But how they're consuming video -- traditional TV and otherwise -- is ever-changing thanks to availability and advancements, ease-of-use and economics. And the number of American homes who Cord Cut their big cable with broadband Internet and no pay-TV subscription rose 22.8 per cent in the third quarter of 2011 relative to the same period of 2010, but still account for less than five per cent of the total number of TV households, according to a Nielsen's latest Cross-Platform Report.


Consumers are staying connected. The vast majority (90.4 per cent) of U.S. TV households pay for a TV subscription (cable, telephone company or satellite), while roughly three-quarters (75.3 per cent) opt for broadband Internet. That's a lot, and the percentage of homes has remained stable despite a poor economy and a multitude of entertainment options available to consumers.

In fact, since last year, the number of homes paying for both a TV subscription and broadband has increased 5.5 percent. Changes are afoot, however, as consumers seek out the subscription service that makes the most sense for them. The number of homes subscribing to wired cable has decreased 4.1 percent in the past year at the same time that telephone company-provided (telco) and satellite TV have seen increases of 21.1 percent and 2.1 percent, respectively.


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Nearly a million more homes are subscribing to broadband while skipping a traditional paid TV subscription.

There are 5.1 million broadcast-only/broadband homes, compared to 80.8 million cableplus/ broadband homes and 22.3 million homes that subscribe to cable-plus and no broadband. Though broadcast only/broadband homes comprise the smallest subscriber group, the number of these homes has increased by 22.8 percent since Q3 2010. The increase in broadcast-only/broadband homes is the most significant of any category, though it is not necessarily an indication of downgrading services. Rather, this could reflect broadcast-only homes upgrading to broadband as their needs change.

Further underscoring the importance placed on broadband Internet, the number of homes subscribing to cable-plus and no broadband decreased 17.1 percent since last year. The proportion of ethnic households opting for specific TV distribution sources—cable, telco and satellite—has also shifted. Wired cable is still the top subscription choice for White, African-American, Hispanic and Asian households, but it now represents a smaller share of paid-TV subscriptions than it did in just Q1 of 2011. Those subscribing to satellite has remained relatively stable, as have broadcast-only households of all ethnicities.

Interestingly, the biggest shift between subscription types has been among Asians. While nearly two-thirds of Asians subscribed to wired cable in Q1 2011, that number is now just half (at 51 per cent). And, 12 percent of Asians now opt for telco delivery, up from nine percent in 2010.

Hispanic homes are more likely to be broadcast-only (15 per cent) or pay for satellite (34 per cent) than any other ethnicity.


Cord-Swapping Continues—As noted, nine-tenths of all TV households pay for content—either cable, from a telephone company or via satellite—and that number has remained relatively flat year-over-year. However, some consumers continue to explore the best fit within these provider types. Broadcast-Only/Broadband Homes in Focus—Though less than 5 percent of the television households, there are interesting behaviors being observed in these homes. U.S. consumers in homes with broadband Internet and free, broadcast TV stream video twice as much as the general cross-platform population . They also watch half as much TV. 

Whether they're cord-cutters or former broadcast-only homes that upgraded to Internet service, these homes represent a very small but growing group of U.S. consumers. Interestingly, roughly the same percentage of consumers in broadcast-only/broadband homes watch traditional TV, stream or use the Internet as in all cross-platform homes; the difference between these groups falls to time spent on these activities. Even broadcast-only/broadband homes spend the majority of their video time watching traditional TV: 122.6 minutes, compared to 11.2 for streaming on average each day. 

And the younger demographics are leaving linear TV in swaths. From a recent New York Times article:

The divide along a demographic line reveals the effect of Internet videos, social networks, mobile phones and video games -- in short, all the alternatives to the television set that are taking up growing slices of the American attention span. Young people are still watching the same shows, but they are streaming them on computers and phones to a greater degree than their parents or grandparents do.

... “If the trends hold,” argues the Times, “the long-term implications for the media industry are huge, possibly causing billions of dollars in annual advertising spending to shift away from old-fashioned TV.”

More coverage of the report at IPTV News, TV Technology, Fierce Cable, Rapid TV News, and Lost Remote.


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