April 4, 2012 By Alissa Skelton on Mashable
Users aren’t completely ditching pay-TV subscriptions, but a new report says 3.58 million people in the U.S. will have cut the TV cord by the end of 2012.
A report entitled “The Battle for the North American Couch Potato: Online & Traditional TV and Movie Distribution” [PDF] is just one indicator that paid online streaming TV and movie services are growing and pay-TV subscriptions are slowing.
From 2008 to 2011, the Convergence Consulting Group estimates 2.65 million — 2.6% of the U.S. population — ended their pay-TV subscriptions and replaced them with online streaming services such as Netflix. More than 40% of U.S. pay-TV subscribers became non-subscribers by dropping their service in 2011. According to the report, Canadian TV services have seen a slower bleed — about 83,000 Canadians, or .7%, dropped their pay-TV subscriptions in 2011 to watch online subscription services.
Compared to 2010, U.S. TV services added 160,000 fewer subscribers in 2011. The number dropped from 272,000 in 2010 to 112,000 in 2011. Convergence Consulting estimates 185,000 people will start new TV subscriptions in 2012.
SEE ALSO: We Now Watch Less Live TV, But More Programming Thanks to DVRs [STUDY]
“Kiosk, mail and now streaming rental (assuming sufficient usage) offer a lower-price value proposition and have radically altered the rental channel while negatively impacting DVD/Blu-ray/Download sales, and encroaching on TV subscription,” the report said.
Online TV watching is expected to increase in 2012 and years to come. In 2011, about 18% of U.S. broadcast specialty-network viewers watched an average of one to two shows online per week — an increase from 16% in 2010.
Advertisers are following their viewers onto the web. The research firm says online ad revenue is increasing. Broadcast and cable network’s online TV advertising revenues reached $1.9 billion, or 2.8% of U.S. Broadcast/Cable Network TV advertising revenue, in 2011. Online TV network’s ad revenue is expected to climb 3% in 2012, Convergence Consulting estimates.
Which do you prefer to use: TV subscriptions or online subscriptions? Tell us in the comments.
