More broadband connected households in the United States are foregoing pay-TV services, a new study from Leichtman Research Group shows.
LRG said the number of households that had a broadband service but didn’t subscribe to any pay-TV service increased 12.5% in 2013, after remaining essentially unchanged in 2011 and 2012.
But the numbers are small, said LRG President and Principal Analyst Bruce Leichtman. The report, “Broadband Access & Services in the Home 2013,” said 9% of all households get broadband, but do not subscribe to a multi-channel video service — compared to 8% the past two years.
Leichtaman said the increase more likely shows that “the multi-channel video business is now essentially flat – at about 86% of households,” and didn’t necessarily indicate a tradeoff of broadband for video services.
He also said economic may play a factor.
“The broadband/no multi-channel households tend to be more economically motivated ‘price seekers’ than they are ‘alternative video seekers,” Leichtman said, spending about 15% less per month on broadband service than those with a multi-channel video subscription.
In August, LRG reported that the thirteen largest multi-channel video providers in the U.S. — representing about 94% of the market — lost about 345,000 net additional video subscribers in 2Q 2013. In 2Q 2012 and in 2Q 2011, the multi-channel video industry lost about 325,000 subscribers
LRG today, meanwhile, also pointed out that overall online penetration, at 83% of U.S. households, also is flat. The best potential for growth being the ability to convert “those online who do not subscribe to a broadband service,” Leichtman said.
LRG’s report also showed:
- Overall, 83% of households get an Internet service at home, and 55% of adults access the Internet on a Smartphone. While the percentage of households getting Internet service at home is similar to last year, those accessing the Internet on a Smartphone increased from 44% last year.
- Of that 83% connected to the Internet at home, the study said, 94% of them are connected through a broadband connection, up from 92% last year, 75% in 2008, and 33% in 2004.
- Availability of the Internet is now, essentially, universal, the report said. Less than 1% of the 1,304 homes surveyed said they didn’t have a broadband service available in their area, down from 6% in 2008.
- 64% of broadband subscribers also access the Internet on a Smartphone — compared to 52% last year
- 19% of all not online at home access the Internet on a Smartphone — compared to 12% last year
- 1% of households paid to subscribe to Internet service at home in the past year, do not currently subscribe, and do not plan to subscribe again in the next six months
- 42% of households with annual incomes less than $30,000 do not use a laptop or desktop computer at home — compared to 8% with incomes of more than $30,000.
The findings are based on a telephone survey of 1,304 households from throughout the United States.
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