Pay-TV Bills Rise 7.2% In 2012: Study

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U.S. households now spend an average of $78.63 per month on multichannel video service -- up 7.2% from a year ago -- but there's still no evidence of widespread "cord cutting," according to a consumer survey conducted by Leichtman Research Group.

About 87% of households nationwide subscribe to some form of multichannel video service, LRG found. That's that the same percentage as in 2011 and 2010, according to the research firm.

Meanwhile, the self-reported mean average monthly spending on pay-TV service has increased more than $12 per month over the last three years, up from $66.25 in 2009. From 2010 to 2011, subscription TV spending increased 3%, from $71.24 to $73.35 per month.

And higher-income households are significantly more likely to take pay-TV service. Nationwide, 94% of homes with annual household incomes over $75,000 subscribe to a multichannel video service, compared with about 88% of those with incomes of $30,000 to $75,000, and about 73% with incomes under $30,000.

Overall, the mean annual household income of multichannel video subscribers is 53% higher than the household income of nonsubscribers.

"The defining characteristic of those who do not subscribe to a multichannel video service remains the level of household income," LRG president and principal analyst Bruce Leichtman said. "In addition, those facing economic challenges are most likely to switch provider, or reduce spending on services."

Among those who said they are most negatively affected by the economy, 39% said they reduced spending on TV, Internet and phone service in the past year compared with 18% of those less affected by economic issues, LRG found. In addition, 16% of those negatively affected by the economy said they are likely to switch video providers in the next six months compared with 8% of those less affected by the economy.

The LRG study is based on a telephone survey of 1,369 adults 18 and older across the continental U.S. conducted in April and May 2012. The overall sample has a statistical margin of error of 2.6%.

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