The threat of consumers cutting the cord on pay-TV services for lower-priced alternatives may have been overblown, revealed market research firm The NPD Group. Viewers aren't severing television subscription plans; they're just spending more and more time with on-demand video services such as Netflix and Hulu.
"Even though many consumers are paying for more content from their TV-service providers in the form of premium channels and video-on-demand, there's still quite a lot of alternative video downloading and streaming activity going on," said Russ Crupnick, senior vice president and entertainment analyst for The NPD Group.
NPD's research revealed 27 percent of U.S. pay-TV customers subscribe to Netflix and 46 percent spend extra for special premium channels. Meanwhile, 73 percent of Internet-based video viewers also pay for traditional television programming.
Cord-cutting is much less of a threat to TV companies compared to cord-throttling, concluded Crupnick. He added that matching features would go a long way toward leveling the playing field.
"With all the various methods consumers now have to download video, TV-service providers would be in a better competitive position if they could expand their content offerings and improve on-screen search functionality," explained Crupnick. "If the programming and user experience aren't on par with digital alternatives, operators could find themselves increasingly sharing their customers with Netflix or other OTT services, like Apple TV and Roku."
Ironically, Netflix itself was the victim of a little cord-cutting recently. The Los Gatos company announced in September it expected to lose between 800,000 and 1 million subscribers this fall. An unpopular price hike - plus the pending loss of Starz content - had a largely negative impact on the streaming giant's business, leading to stock price plunges and a wave of angry feedback. (via The NPD Group)
How do you divide your viewing time between OTT and traditional pay TV? Let us know in the comment section.
