Kagan: 10% of U.S. to Cut Cord by 20127/25/2011 12:01 AM Eastern
Did penetration of pay-TV peak in 2009?
That’s the suggestion from a new report from SNL
Kagan, which predicts the cord-cutting phenomenon
will begin to put significant pressure on cable, satellite
and telco TV growth starting this year.
So far, so-called cord-cutting has been relatively minimal.
But by the end of 2011, an estimated 4% of occupied
U.S. households — 4.5 million homes — will have substituted
Internet video options for pay television service, according
to the research firm.
And the trend will pick up speed, with over-the-top
substitution growing to 12.1 million of occupied U.S.
homes by 2015, or about 10% of all households.
“Though the thin slice of households relying [on overthe-
top] substitution could be dismissed as evidence of a
lack of momentum behind cord cutting, the 4.5 million
households it represents are not inconsequential, particularly
in light of the basic subscriber declines for the cable
industry,” the firm wrote in
the new report.
The data shows penetration of
traditional pay television services
may have topped out at 86%
in 2009, according to SNL Kagan.
That dropped to an estimated
84.9% of the occupied U.S.
households at the end of 2010
(after eliminating the overlap of
customers with multiple subscriptions),
the research firm said.
SNL Kagan projects continued
absolute growth in pay TV subscribers,
but the pace is “not expected
to keep up with occupied
household formation, leading to
a long-term decline in penetrations
for multichannel services,”
it said in the report.