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Market Share Shifts More Significant than Video Cord Cutting

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February 09, 2012

Market Share Shifts More Significant than Video Cord Cutting

By Gary Kim
Contributing Editor


Americans spend more than 33 hours per week watching video across their available screens, according to the latest Nielsen Cross-Platform Report. Observers often watch such trends for signs that consumers are abandoning traditional video channels in favor of new channels. The Nielsen report does not yet show massive movement.

You will not be surprised to learn that the latest study suggests consumers are using different channels, though.

To a large extent, there is significant market share change. 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 and satellite TV have seen increases of 21.1 percent and 2.1 percent, respectively.

To be sure, less than five percent of TV households seem to be watching broadcast TV only or no TV at all.

But the technological capability to watch all TV and video online is growing. Homes with broadband Internet and free, broadcast TV only are on the rise, growing 22.8 percent over last year.

These households stream video twice as much as the general population and watch half as much TV.

Whether they’re cord cutters or former broadcast-only homes that upgraded to Internet service, these homes represent a growing group of U.S. consumers.

Separately, IHS (News - Alert) pointed out that total U.S. video subscriptions in the second quarter of 2011 decreased to 100.6 million, down from 101 million in the first quarter.

That decrease represented only the third time in history that the U.S. subscription video market suffered a sequential quarterly decline. The previous market contractions occurred in the second and third quarters of 2010. That might represent the start of a change, but is not anywhere close to becoming a tipping point.

On the other hand, though it is necessary that massive number of U.S. consumers have fast broadband, to be able to create a new over the top market for video, it is not sufficient. Still, the underlying delivery mechanisms are not the current barrier to change. Some 75.3 percent pay for broadband Internet (up from 70.9 percent in 2011).

About 90.4 percent pay for cable, telephone company-provided TV or satellite video. Both those sets of statistics suggest that “pipes” are not the issue.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Rich Steeves

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