Policy

CEA Survey: 10% Of Pay-TV Households Plan To Cut Cord In 2011

Trade Group Highlights Survey Finding Only 8% Of TV Households Rely On Broadcast 5/31/2011 5:52 PM Eastern

About 10% of pay-TV households are planning to cancel their cable, satellite or telco TV service this year -- but they're turning to Internet sources of content, not over-the-air broadcasts, according to research from the Consumer Electronics Association.

CEA called out the findings on over-the-air households, noting that currently 8% of all U.S. TV households rely on broadcast TV. That represents some 9 million homes, a number that has been steadily declining since 2005, according to the group.

The trade group has been lobbying the U.S. government to institute voluntary incentive auctions for broadcast spectrum, arguing that it is a resource better used for high-speed wireless data services.

"Over-the-air TV was once the defining distribution platform," CEA president and CEO Gary Shapiro said in announcing the survey results. "But using huge swaths of wireless spectrum to deliver TV to homes no longer makes economic sense. Congress should pass legislation to allow for incentive auctions so free market dynamics can find the best purposes for underused broadcast spectrum, such as wireless broadband."

Shapiro continued, "Contrary to the National Association of Broadcasters' assertions, antenna sales are falling and cord-cutters are not shifting to over-the-air television but rather to the Internet. The only cord being cut these days is the one to the antenna."

The phone survey of 1,256 adults was conducted in December 2010, using Opinion Research Corp.'s computer-assisted telephone interviewing system.

Responding to the CEA survey, National Association of Broadcasters spokesman Dennis Wharton said, "CEA has zero credibility when it comes to calculating over-the-air TV viewership. Knowledge Networks has stated that over-the-air exclusive homes are more than 14% and rising. We trust an unbiased research firm over a survey paid for by CEA."

According to the CEA's survey, on the pay-TV front, about 76% of respondents said they were "unlikely" or "very unlikely" to cancel pay-TV service in the next 12 months, 14% said they were "somewhat likely" or "somewhat unlikely" to do so; and 10% said they are "likely" or "very likely" to cut the cord.

Cable, satellite and telco TV services remain the most popular source for video content, cited by 80% of respondents, followed by: Blu-ray/DVD (72%), free video-on-demand (45%), DVR (41%), paid VOD or pay-per-view (33%), online sources such as YouTube (31%), free online TV shows and movies such as from Hulu (27%), and paid online services such as Netflix (22%).

Approximately 96% of U.S. households, or 114 million, own a TV, the CEA estimates. The report is available here: http://www.cesweb.org/shared_files/ECD-TOC/CEACordCuttingAnalysis.pdf.

 -- John Eggerton contributed to this article.

September