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Study: 22% of Broadband Homes Use Netflix Streaming

24 Aug, 2011 By: Erik Gruenwedel

New Parks Assoc. study finds 13% of U.S. broadband households slashed their cable bill in the past 12 months, with another 9% cutting back going forward

Cord-cutting — the buzz term downplayed by cable and satellite TV operators to describe subscribers who downsize or sever their monthly bill in favor of cheaper over-the-top services such as Netflix — is picking up momentum, according to a new report.

Dallas-based research firm Parks Associates, in a blog post, said 22% of respondents in a recent survey have, or will scale back their monthly cable bill, including 3.9 million people who said they watch Internet-based video entertainment.

These subscribers typically spend about $20 month on video services and watch an average of about 4.2 hours of Web-based video on their HDTV a week. Indeed, Comcast and Time Warner Cable reported a combined loss of 300,000 video subscribers during their most recent fiscal reports.

The research firm said 22% of broadband homes now use Netflix’s streaming service, with many others accessing content on YouTube. In fact, Parks recommended that set-top manufacturers incorporate a YouTube app in their devices similar to what TV manufacturers are doing.

Park noted that nearly 50% of all flat-panel TVs sold in 2011 will be Internet-connectable and about two-thirds of U.S. broadband households will have a video game console connected to the Internet. Consumer sales of Internet-connectable TV devices will go to nearly 350 million units worldwide by 2015.

Meanwhile, the firm said efforts by media companies and cable operators to retain subscribers through TV Everywhere platforms will be ineffective going forward.

Specifically, Parks said just 11% of subs, or 6.5 million households, would be willing to pay a premium of no more than $15 for ubiquitous access to content through TV Everywhere. It suggests TV Everywhere proponents entice subs through no-frills packages.


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