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U.S. Pay-TV Downgrader and Cord-Cutter Analysis


The debate about the health of the U.S. pay-TV sector rages on, as key quarterly financial results and current business model analysis is published. While the market continues to fragment, more insight is being shared about the emergence of distinctive consumer market segments and the likely impact of this trend.

eMarketer reports that as over-the-top (OTT) video viewing becomes a bigger part of the video news and entertainment ecosystem, some consumers are finding it easier to either reduce or terminate their traditional pay-TV subscriptions.

In summary, Yankee Group found 11 percent of U.S. consumers had considered canceling their pay-TV service, though only 2 percent actually did. Wedbush Securities found 12 percent of consumers had cut premium services over the past year, while 7 percent had totally cut pay-TV. Meanwhile, Strategy Analytics predicted in September that 13 percent of Americans would terminate services next year.

According to a survey by SAY Media, 13 percent of U.S. internet users already fall into the category they call opt-outs -- meaning viewers either don't have a television or haven't watched live TV in the past week, but they stream at least 4 hours of internet video weekly.

Another one in five internet users was an on-demander -- a viewer who also streamed at least 4 hours per week of online video and who spends less time watching regular television than a year ago.

Both on-demanders and opt-outs were somewhat younger than other internet users. But while on-demanders tended to be more affluent than average, opt-outs were poorer than any other group. Their online networks were smaller than average, and they were about half as likely as on-demanders to have a Netflix subscription (25 percent vs. 47 percent).

They owned fewer devices for watching video than any other group -- probably because some of them lacked TVs, and they were the least likely group to own a mobile video device.

Studying the non-subscribers of Netflix suggests that some people, along with those most likely to join them, will simply use free video content on one of the aggregation sites like Hulu or the individual TV network sites. They visit those sites frequently, watching 57 hours of online streaming video a month, compared with 42 hours for on-demanders.

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