TV Sets Are Connected To Internet In 38% Of Homes

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Nearly two-fifths (38%) of all U.S. households have at least one television set connected to the Internet, up from 30% last year and 24% two years ago, according to a new study from Leichtman Research Group.

The TVs could be sets with their own connection or could be connected via a videogame system, Blu-ray Disc player, Apple TV or Roku set-top box. These findings are based on a survey of 1,251 households nationwide that was primarily conducted in February 2012 and are part of a new LRG study, "Emerging Video Services VI."

In another sign of the growing importance of game consoles in delivering video into the homes, videogame systems were the primary connection, with 28% of all households owning a video game system connected to the Internet. Just 4% of all households are connected solely via an Internet-enabled TV set, and Apple TV or Roku set-tops are the only connected devices in 1% of all households.

While the study found growing penetration of connected devices, it did not find that this shift in viewing patterns was reducing multichannel subscriptions.

Overall, 1.6% of households were not subscribing to a multichannel-video service but had previously subscribed to one in the past year. In addition, just 0.1% of the respondents who dropped service in the past year and do not plan to subscribe again in the next six months told researchers that they don't subscribe to pay-TV because of Netflix or because they can watch all that they want on the Internet or in other ways.

"Video is increasingly being watched on different platforms and in different places, yet these emerging video services still generally act as complements to traditional television viewing and services rather than as substitutes," LRG president and principal analyst Bruce Leichtman said. "Among all adults, reported time spent watching TV is similar to last year, and there remains little evidence of a significant trend in consumers 'cutting the cord' to their multichannel video services to watch video solely via these emerging services."

The study also highlighted the importance of Netflix in driving viewing of video on connected devices. About 35% of Netflix subscribers watched video from the Internet via a connected device weekly, compared with 5% weekly use among all non-Netflix subscribers.

Overall, the study found that 13% of all adults watch video from the Internet via a connected device at least weekly, compared with 10% last year and 5% two years ago.

About 16% of all adults watch full length TV shows online at least weekly -- compared with 12% last year and 10% three years ago, the new survey found. Among all mobile phone owners, 19% watch video on their phones weekly versus 15% last year and 6% three years ago.

Tablet usage remains somewhat smaller, with 9% of all adults watching video on an iPad or other tablet computer weekly, up from 2% last year.

The study also includes a great deal of data on Netflix users, finding that 16% of all adults use Netflix's Watch Instantly feature weekly, compared with 12% last year and 4% two years ago. About four-fifths (79%) of Netflix Watch Instantly customers use it to watch movies and television shows on a TV set, and 59% of this group access Netflix via a videogame system.

About half (50%) of Netflix subscribers are satisfied with the service, and 11% are likely to stop subscribing to Netflix in the next six months. But only 7% of Netflix subscribers reported that they were are likely to switch from their multichannel video provider in the next six months -- compared with 12% of non-Netflix subscribers. About 13% of Netflix subscribers would consider reducing spending on their multichannel video service because of Netflix, a significant drop from 21% last year.

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