Online video adoption might help shrink cable base

DIGITAL: U.S. TV households to grow 1.3% a year over next decade, with more units connected to Internet

By Danny King -- Video Business, 10/13/2009

OCT. 13 | DIGITAL: Internet video could put a crimp on cable.

The number of U.S. cable-television subscribers will fall slightly over the next decade as more people get their TV content from the Internet, research firm SNL Kagan said in a report.

The number of U.S. television households will grow 1.3% a year over the next decade, but the number of cable subscribers will fall to 60.7 million in 2019 from 63.2 million this year, SNL Kagan said. The satellite-television subscriber base will be little changed at about 33 million households.

Such lack of growth can largely be attributed to more televisions being connected to the Internet. Homes receiving so-called over-the-top video will total about 15 million in 2019, more than twice the number in 2013. The value of consumer electronics components that can be connected to the Internet will increase by 23% a year over the next five years, totaling more than $10 billion in 2014, ABI Research said in a separate report.

"Though operators are downplaying the impact of online video on multichannel subscriptions, the early adoption trends suggest a growing stature for over-the-top substitution," according to the SNL report.

U.S. online video viewers are spending about 45% more time per day watching videos over the Internet than a year ago though far less time than watching TV, suggesting that Internet-based content viewing through televisions is set for rapid growth, Nielsen reported last month. ComScore in July said year-over-year Internet video-viewing growth almost doubled.

Still, telecommunications-based TV services such as Verizon's FiOS and AT&T's U-Verse will continue their rapid growth trajectory, with the telecom-based TV subscriber base tripling to about 17 million households over the next decade, SNL Kagan said.