Report: Netflix users are increasingly likely to cancel pay TV services

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Have you promptly canceled a pre-existing pay TV package in the last year because of your Netflix subscription? If so, you’re not alone.

A report published by analyst firm The Diffusion Group this week found that the amount of Netflix subscribers likely to cut back on cable TV costs as a direct result of using the streaming VOD service has doubled from 2010 to 2011 – rising from 16% to 32%. Is this just a temporary setback for networks, or a sign of things to come? The TDG is leaning toward the latter.

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Report: Netflix users are increasingly likely to cancel pay TV services

“The question for realistic observers has been not if this will occur but when. According to our latest research, that time is upon us,” said Michael Greeson, Director of Research at TDG.

Greeson is alluding to a clash of interests between Netflix and the pay TV giants – something both sides have ostensibly recognized. Cable networks like Showtime and Starz have already scaled back Netflix support this year, while Netflix bought the rights to its own exclusive series, “House of Cards.”

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As each side jockeys for position in a war for home entertainment dollars, cable stations may be at a disadvantage. The report discovered that around 50% of the 2,000 surveyed Netflix subs said they plan to cut back on what they spend on cable TV by year’s end strictly due to the costs associated, while 34% said online streaming (specifically Netflix) has rendered paying for TV an unnecessary expense.

Thousands of Netflix members lashed out at the company over the past week due to an abrupt user interface change that altered the official website’s layout and left frustrated users no official option for the “classic” design.

On Thursday, Tom Willerer, a product team member at Netflix, announced on the company’s blog that more change was on the way. This time, “avatars, nicknames and bios associated with reviews” are getting the axe. “Very few Netflix members use them,” explained Willerer. (via The NY Times)

Have you cut back on pay TV since signing up for Netflix or another streaming video service? What do you think about the recent changes to Netflix? Let us know in the comment section.

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