Market Overview

Some Americans Ditching Pay TV In Favor Of Internet Only

Techcrunch.com recently posted an interesting article which examines the shifting TV watching habits of Americans and how they are being influenced by the increasing pervasiveness of broadband internet. Using data from Nielsen, Techcrunch notes that "the number of U.S. homes that have broadband Internet, but only free, broadcast TV, is on the rise. Although representing less than 5% of TV households, the number has grown over the past year."

The implication of these numbers is that a segment of consumers are coming to the conclusion that they no longer need cable or satellite television and that the versatility of broadband internet could be cutting into the pay TV market. For example, according to Nielsen's data, homes that have broadband internet along with free broadcast TV only, stream twice as much video as the general population.

Nielsen points out that all of these homes may not be so called "cord cutters," the term which refers to people who have given up cable TV for streaming TV/streaming video on the internet, and that some of them may be households who only had broadcast TV but have upgraded their internet to broadband.

While the number of free TV/broadband internet homes is still small, accounting for around 4.5% of households, the numbers are growing, and the habits of these users are unique. According to the Nielsen data, broadcast TV only homes spent 122.6 minutes per day watching TV versus 265.5 minutes for homes that have both pay TV and broadband internet.

The broadcast TV only households, however, stream more video over the internet - 11.2 minutes per day vs. 5 minutes. What is interesting, however, is that neither of the groups, on average, are streaming very much over the Internet. Techcrunch suggests that this is because "the Internet may not be just a new medium for TV to travel over, it's an alternative to TV watching entirely."

Undoubtedly, this is true, although the data suggests that this phenomenon is more identifiable in younger people. According to Techcrunch, those aged between 12 to 34 are spending less time watching TV while those older than 35 are spending more, and people over 55 watch the most television. These figures appear to support the idea that younger consumers are being pulled away from the television by the Internet.

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