Parks Associates Finds Less Than Six Million U.S. Households Would Consider Canceling Pay-TV Service in Favor of Online Video
Online Video Not Yet a Threat to Pay TV
DALLAS, TX--(Marketwire - February 3, 2010) - Despite the growing amount of video available
online, less than 8% of U.S. broadband households are considering canceling
their pay-TV services in favor of online video, according to Parks Associates' "All Eyes on
These results from "All
Eyes on Video" are in line with previous Parks Associates studies,
which do not show an appreciable likelihood of subscriber churn in favor of
online video services. A 2008 study reported 11% of U.S. broadband
households were considering canceling pay-TV services, and in an earlier 2009
survey, the number was 10%.
"All Eyes on Video"
found approximately 5.5 million homes would be open to canceling pay TV due
in part to the availability of online video. At the same time, one-half of
these households are also considering a switch to a new pay-TV provider,
indicating the primary threats to companies such as Verizon, Comcast,
DirecTV, and Cablevision are still their traditional competitors.
The households likely to switch or cancel their services watch a whopping
10 hours of online video each week, much higher than typical video
consumers. They express strong interest in having online access to pay-TV
channels (e.g., TV Everywhere), which highlights an opportunity for
traditional pay-TV providers to solidify their base through the deployment
of such features. Offline video consumption is also higher. Their median
number of DVD rentals from the last six months is 18, compared to two
rentals among other households.
"The threat of cannibalization is real but misunderstood," said John Barrett, director, research, Parks
Associates. "Nobody is going to rely on online video alone -- households
likely to cancel their TV services are going to use a mixture of online
video, free-to-air broadcasts, and DVDs, including rental services such as
Netflix and redbox."
Barrett also discounted the immediate threat of
migration to online video. "Very few households have made the switch, a
sign that the alternative is not yet compelling."
"All Eyes on Video"
surveyed U.S. and Canadian broadband households to gauge current consumer
usage and attitudes for advanced video devices and services. For more
information, visit www.parksassociates.com/video or contact
About Parks Associates
Parks Associates is an internationally recognized market research and
consulting company specializing in emerging consumer technology products
and services. Founded in 1986, Parks Associates creates research capital
for companies ranging from Fortune 500 to small start-ups through market
reports, primary studies, consumer research, custom research, workshops,
executive conferences, and annual service subscriptions.
Each year, Parks Associates hosts executive thought leadership conferences
CONNECTIONS™, with support from the Consumer Electronics Association
(CEA®), and CONNECTIONS™ Europe. In addition, Parks Associates
produces the online publication Industry Insights in conjunction with the
CONNECTIONS™ Conference series.