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No Live TV? No Problem

MORE U.S. CONSUMERS SHUN TRADITIONAL TELEVISION: NIELSEN 3/17/2013 8:00 PM Eastern

The ranks of Americans living off the TV grid are growing.

About 5 million U.S. households neither have pay TV nor watch over-the-air television. While that number represents just 4.2% of the population, it has more than doubled in the last five years, according to Nielsen’s cross-platform research for the fourth quarter of 2012.

Some of those are “cable nevers,” and around 1.25 million of those households don’t even own a TV. Nielsen does not break down of how many consumers in this cohort have canceled pay TV recently, but a portion of them certainly are “cord-cutters” who make do with Internet video sources — a new virus that could endanger the health of cable, satellite and telco TV services.

Nielsen dubs this segment “zero TV” households, but that’s a misnomer: About 75% of them have at least one TV set, and 67% consume video from Internet sources. Roughly 48% of them watch TV content through subscription services such as Netflix or Hulu Plus, the research firm estimated.

Still, regular TV remains more popular than ever. Average monthly live-TV viewing climbed more than three hours in the fourth quarter from a year earlier, to an average of 156 hours and 24 minutes, according to Nielsen.

And indeed, the Internet is reinforcing the love affair most people have with television. “American viewing is growing, and people are finding ways to extend the viewing hours in their days — thanks in part to developments in mobile and streaming technology,” Nielsen senior vice president of insights Dounia Turrill wrote in the report.

The main reasons “zero TV” consumers cite for not having pay TV or receiving broadcast TV are cost (36%) and lack of interest (31%). Only 18% of this segment is considering subscribing to TV services, according to Nielsen. Last month, Nielsen announced it will expand its definition of a TV household, for ratings purposes, to include homes with broadband- connected televisions. The change, which starts this fall, is largely symbolic, as industry observers do not expect it to have a real effect initially on total TV ratings.

Perhaps not surprisingly, nontraditional TV homes are more likely than the rest of the nation to comprise young, single individuals who have no kids.

About of 44% of “zero TV” consumers are under 35 and 41% live alone, versus 18% and 26%, respectively, of pay TV and broadcast households, Nielsen found. Only 20% of the nontraditional TV homes have children 17 or younger, compared with 33% of TV households, according to the Nielsen report.

TAKEAWAY

Though still statistically small, the number of U.S. households shunning pay TV has doubled over the last five years.

September