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Report: Non-MVPD Homes Driving SVOD Growth

12 Aug, 2013 By: Erik Gruenwedel

Not surprisingly, Netflix ranks high among households not subscribing to a bundled TV program plan offered by their cable, satellite or telecommunications providers, according to new data from Leichtman Research Group.

Among a survey of 1,319 respondents who characterized themselves as so-called “cord-cutters” and “cord-nevers” (those who have never subscribed to a MVPD service), 40% subscribed to Netflix, 11% to Amazon Prime, and 7% to Hulu Plus.

Indeed, 42% of non-subscribers get at least one of these three over-the-top (OTT) services, and 58% said they do not get any.

Meanwhile, the data suggests that 8% of all TV households still watch over-the-air broadcasts — down from 10% in 2010, and 6% watch a combination of over-the-air and OTT programming. This group includes about 1% of all households that do not subscribe to a multi-channel video service primarily because they can watch all that they want via the Internet or on Netflix.

Indeed, 10% of non-subscribers had subscribed to a multi-channel video service in the past year, and 7% plan to subscribe to a service in the next six months.

Overall, about 1.4% of all TV households paid to subscribe to a service in the past year, but currently do not — a similar rate to the past five years. About 5% of current multi-channel video subscribers did not subscribe at some time in the past two years and just watched programs from the Internet instead

"The number of households subscribing to a multi-channel video service is slightly higher than it was three years ago, yet the penetration of households subscribing to a service is now below its peak," said Bruce Leichtman, principal analyst for LRG, in a statement. "While some consumers continue to go in and out of the category, economic factors appear to be as a strong force in shaping this market as the emergence of over-the-top alternatives alone."

Among other findings:

  • Nationwide, 20% of TV households with annual incomes less than $50,000 are non-MVPD subscribers, compared to 9% with incomes above $50,000 — a division that has been fairly consistent over the years. According to LRG.
  • The mean reported monthly spending on multi-channel video service is $83.25 — an increase of almost 6% from last year. Multi-channel video subscribers with household incomes above $50,000 spend 18% more per month on TV programming than those with incomes less than $50,000.

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