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NPD: Blu-ray Players Driving Broadband Video Consumption

27 Jun, 2011 By: Erik Gruenwedel

Report says economy, not Internet-based premium video, is driving declines in pay-TV subscriptions

The numbers of people accessing premium (not user-generated) broadband video content in the home will reach 175 million by 2015 — driven by connected Blu-ray Disc players and HDTVs, according to a new report.

The NPD Group said the number of users accessing premium broadband video content at coffee shops (such as Starbucks), bookstores and other free Wi-Fi areas (dubbed “nomadic” users) will top 154 million by the same time. About 10 million nomadic users accessed broadband video in 2010, a figure that should almost double this year and in 2012.

Users watching broadband premium video on mobile phones and other portable media devices will grow to 77 million from 6 million in 2010, 10 million this year and more than 20 million users in 2012.

“Over the next few years, broadband video usage will predominantly be driven in the home by Blu-ray players and connected televisions,” said Ross Rubin, executive director of industry analysis at NPD and co-author of the report. “Handset manufacturers, though, have opportunities to tailor devices and software to the increasing prevalence of video.”

Despite the exponential growth of premium broadband video content, it is not directly affecting declines in pay-TV subscribers — despite some media reports and industry scuttlebutt. Only 4% of consumers surveyed for the report said they have completely given up pay-TV service due to broadband video.

More consumers are scaling back pay-TV services. Nine percent of respondents said they reduced the amount they spent on pay TV in the past year, and an additional 11% said they are likely to reduce their pay TV in the next year.

“The reduction in pay TV, or cord shaving, is really just a way for consumers to cut back on their monthly entertainment bills, for now,” said Linda Barrabee, research director of Connected Intelligence at NPD and co-author of the report. “It actually sets the stage later on for broadband video usage to grow as consumers get back into the premium content market but look for less expensive alternatives.”


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