Back in June of 2010, Nielsen proclaimed that the idea of TV cord cutting in favor of Internet video alternatives was "purely fiction." A year and a half later and the company's latest report
(reg. required) almost goes out of its way not
to acknowledge cord cutting exists, despite finding that homes with broadband but without paid TV are on the rise. The percentage of people who have just OTA and broadband rose 22.8% since last year, and while they still comprise just 5% of all TV households, it's a segment that's slowly becoming less "fictional" in the face of relentless cable industry price hikes.
As for pay TV options, there continues to be a migration away from traditional cable and toward satellite and telcoTV. The number of homes subscribing to wired cable decreased 4.1 percent in the past year at the same time that telco TV and satellite have seen increases of 21.1 percent and 2.1 percent, respectively. Meanwhile, more than 75% of TV viewers pay for broadband service up from roughly 71% one year ago.
While cord cutters are a very real niche, they do remain a minuscule part of the equation for several reasons. Traditional cable TV is familiar, it's easy, and newer streaming technologies confuse Luddites and the elderly. The cable and TV industry also does a very good job trying to viciously crush any and all disruptive Internet video operations (see their slow but steady licensing strangulation of Netflix
as exhibit A).
Traditional cable is a massive and established industry, and it's not going anywhere. Between 2008 and 2011, the number of users watching traditional-but-time-shifted (DVRs, Slingboxes) television jumped by 66%, while the growth in those watching TV on the Internet jumped 21.7% in the same period. During that same stretch, mobile video consumption (mostly thanks to TV Everywhere offers that require a paid TV subscription) has exploded to the tune of 205.7%. Broadband bundles continue to grow, with homes with both paid TV and broadband increasing 5-1/2% last year.
Just like many blogs, analysts and other similar studies focused on video
, Nielsen doesn't discuss piracy's impact on any of these numbers. In fact, Nielsen's eleven page study doesn't mention piracy once. Apparently if you don't mention piracy it ceases to exist, a reflection of the broader cable and broadcast industry belief that their services don't compete with piracy (tip: they do). It seems somewhat important to include those watching pirated content if you're seriously analyzing shifts in video consumption.