Study: Netflix Users Inclined to Downgrade on Pay TV

13 Jun, 2011 By: Chris Tribbey

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A new study by research firm The Diffusion Group shows Netflix subscribers increasingly are downgrading their pay TV service, a bad sign for cable and satellite operators contending against the $7.99-a-month unlimited streaming offering.

The firm’s March survey asked 2,000 U.S. adult broadband users how likely they were to downgrade their pay TV service in the next six months. Thirty-two percent said they were likely to either downgrade or cancel altogether, double the 16% who said the same in 2010.

“Despite its rhetorical positioning, both Netflix and pay TV operators have long been aware that there will come a point at which its services are not only dilutive to regular TV viewing, but antithetical to pay TV subscription levels,” said Michael Greeson, TDG founding partner and director of research. “The question for realistic observers has been not if this will occur but when. According to our latest research, that time is upon us.”

Greeson noted that economic belt-tightening also was a likely factor in the survey results, but stressed that a majority of respondents listed the availability of online video as a primary factor in downgrading their pay TV service.
 

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