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There’s been a lot of talk about people canceling their cable TV subscription to stream video on their TVs over the Net, but consumer research firm Nielsen says the number of people actually doing it is still very small.
Cheryl Idell, an executive vice president at Nielsen, told the blog PaidContent earlier this week that many people may be talking about cutting the proverbial cable cord, but few are actually doing it. According to Nielsen data, only 6 percent of broadband households have already stopped using cable in lieu of cheaper Internet-based TV. Idell admitted that consumers may one day forgo paid TV service to watch TV exclusively over a broadband connection, but that day hasn’t come yet.
Still, big cable companies are losing paid TV customers. Comcast reported it lost a net of about 56,000 TV subscribers during the third quarter: the company reported it lost 275,000 basic cable subscriptions during the quarter, but it added 219,000 digital TV subscribers. Also during the third quarter, Time Warner Cable lost 155,000 video subscribers, of which about 46,000 were digital video subscribers.
Some customers are likely going to competitors, such as Verizon Communications and AT&T, which are now offering TV service in some parts of the country. Each of these companies had gains in TV subscribers during the third quarter.
Across the industry, paid TV subscriptions fell for the first time in the second quarter of 2010. The cable companies are blaming the economy for the dip in subscribers, and they’ve downplayed the notion that some of these subscribers may be cutting the cord to watch TV exclusively online.
But there are signs that true cord-cutting is on the way. As more content deals are struck with companies like Netflix, which streams video from the Net to TVs, people may realize they don’t need their cable TV.
Netflix, which is just one of many over-the-top video options available to consumers, is quickly expanding its customer base. During the third quarter, the company saw its subscriber base jump 52 percent compared to a year ago.
Netflix’s CEO Reed Hastings said on the company’s earnings call earlier this month that the streaming offer was definitely fueling subscriber growth. Netflix said 66 percent of its subscribers used its streaming content during the third quarter, up from 61 percent in the second quarter and 41 percent during the same quarter a year ago.
Live sports programming over the Internet could be the straw that eventually breaks that paid TV providers’ back. So far, most major live sporting events are only broadcast on TV and via paid TV services.
Other data coming out of Nielsen this week shows just how slowly technology change can happen in the consumer market. A new study indicates that 80 percent of people watching TV are still watching it in standard-definition. Some of this is explained by the fact that many homes have multiple TVs, where not every room has an HDTV.
Still, Nielsen notes about 44 percent of homes either do not have an HDTV or they don’t subscribe to HD service. For those who do have an HDTV, about 20 percent of viewing is still in standard definition. Part of the problem may be that many people still don’t realize they are watching something that is not in HD.
