Joseph O'Halloran ©RapidTVNews | 26-07-2011
New consumer research from Leichtman Research Group (LRG) has found that fears of mass uptake of online video and over the top (OTT) video services are unfounded, even those with broadband Internet connections.
Yet in what should be a wakeup call for the industry, the principal reason cited for dropping pay-TV is the cost of services followed by a lack of compelling content to pay for.
"While 8% of all households in the US get broadband but do not get a multi-channel video service, it is erroneous to think of this group as making decisions driven by online video," said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. "These decisions tend to be more based on economics, than about alternatives to traditional video services."
Driving home the point that despite the availability of high bandwidth Internet it wasn’t necessarily a driver for online video, Broadband Access & Services in the Home 2011 found that 70% of US households get both broadband and multi-channel video services.
Indeed even among the group getting broadband but not multi-channel video, the report revealed that the reason for not subscribing to a multi-channel video service is generally not driven by online video: a mere 5% of this group doesn't subscribe to a multi-channel video service because they can watch all that they want on the Internet. Moreover only 2% specifically mention the increasingly popular Netflix as a reason for not subscribing; by way of contrast, 28% cite cost, 26% say that they don't watch much TV, and 18% say that they have no need for a service.
The survey also found that those who have broadband and no multi-channel video subscription do not tend to watch online video significantly more frequently than others, nor do they rate the ability to watch online video as being significantly more important in their decision to get broadband than others do. Less than a fifth (19%) of this group watch online video daily, and 55% weekly -- compared to 17% daily, and 48% weekly among those with broadband and a multi-channel video service.
Yet just over two-fifths (41%)with broadband and no multi-channel service rate the ability to watch video online as very important in their decision to get broadband, compared with 37% of those with both broadband and a multi-channel video service