Netflix has nothing to do with flat Pay TV Growth, study finds

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U.S. pay-TV penetration has remained flat, with about five out of every six households currently subscribing to some form of pay-TV service, according to new figures released by Leichtman Research Group (LRG).

Despite an overall increase in the number of households–Nielsen simultaneously released research showing the number of U.S. TV homes has increased 0.5 percent over the last year to 116.4 million–pay-TV penetration has remained flat at about 84 percent since peaking in 2010, LRG’s Cable, DBS & Telcos: Competing for Customers 2014 report says.

“The number of pay-TV subscribers in the U.S. remains about as high as it has ever been, but penetration of pay-TV services in consumers’ homes has declined over the past few years, as subscriber growth has leveled-off, while occupied housing in the US has increased,” said Bruce Leichtman, president and principal analyst for LRG. “Housing growth has been exclusively among renters, who tend to be more challenging for the pay-TV industry than home owners because of their comparatively lower income, younger age, and greater likelihood to move.”

The study, which is based on surveys of 1,260 U.S. households in June and July, found that only 6 percent of those who don’t currently subscribe to a pay-TV service plan on adding one in the next six months. About 35 percent of respondents without a pay-TV service have never had one.  

Notably, LRG says that only 11 percent of non-subscribers indicate that they don’t pony up for pay-TV because they already have an Internet programming service like Netflix (NASDAQ: NFLX) hooked up. This is a bit of a contradiction from a separate LRG report released in June, when the research company said that 48 percent of those who don’t buy pay-TV services have an SVOD subscription to a company like Netflix.

The survey found dissatisfaction equally distributed among different types of suppliers, with 12 percent of cable customers, 11 percent of satellite subscribers and 12 percent of telco bill payers saying they plan to switch services in the next six months.

Also notable: 22 percent of homes that have moved in the past year do not have a pay-TV service, a higher level than previous years, LRG says.

For more:
– read this LRG press release
– read this Nielsen press release

Related links:
Cable has more broadband than video subscribers, report says
Report: UK pay-TV subs are adding streaming services, keeping existing offerings
Netflix cutting into the pay-TV market, report says

Read more about: NetFlixSubscriber Numbers

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