'TV Everywhere' Services May Alienate Online-Only Consumers: Survey

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Consumers who actively watch TV shows on the Internet -- but don't subscribe to cable or satellite services -- have lower incomes than pay-TV subscribers, according to a recent survey by research firm Interpret LLC.

Cable TV "cord cutters" have average annual incomes of $42,314, compared with $60,054 for those who watch TV shows online and also subscribe to cable or satellite service, Interpret found. The average income among those who said they subscribe to a pay-TV service but don't watch programming online was $55,806.

As such, according to Interpret, the monthly expense of a cable bill may be a major deterrent for online-only TV watchers, and TV Everywhere services - which offer programming online for no additional charge to customers who already pay for TV service - may in fact alienate this group. About 51% of cord-cutters said that they turn to the Internet to watch programs so they don't have to pay subscription fees, while 69% said they stream programs online in order to watch them whenever they want.

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"Having ‘cut the cord' and chosen the Internet over cable, these online-only TV fans represent the group that ‘TV Everywhere' was designed to combat," Insight said in the report. However, limiting access to shows "may ultimately backfire, and instead of inducing them to pay for their television habits, this initiative may instead result in increased piracy among these consumers."

The majority of online-television streamers -- 89% -- also subscribe to a cable or satellite service. Insight's report raised the question of whether this group would tolerate the full load of TV ads on their computers, given that 38% of current online streamers turn to the Internet to watch fewer commercials through free sites such as Hulu.

Overall, however, indications are that TV Everywhere-style services would be popular. The report found 72% of users who actively watch streaming Internet video do so specifically to catch up on recent episodes they missed on broadcast television. About 40% of streamers go online to explore shows they have never seen before.

Los Angeles-based Interpret, which specializes in entertainment, media and technology measurement and market research, based the report on a survey 9,032 U.S. consumers. The report, "‘TV Everywhere': Will Consumers Accept a Cable-Based Model for Online Streaming?", was originally published in August 2009.

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