30 Percent of U.S. Homes are Potential Cord-Cutters, Says Report

SCOTTSDALE: In-Stat research indicates that 30 percent of U.S. homes with pay-TV subscriptions could cancel those services in the future and switch to free online TV platforms.

The number of U.S. pay-TV subs gained 0.15 percent in 2010, In-Stat says, indicating that cord-cutting has not yet taken hold. “A substantial portion of pay-TV subscribers, however, exhibit similar characteristics to video cord-cutting households,” said Keith Nissen, principal analyst. “It is important to track these ‘at risk’ subscribers, rather than the pay-TV subscriber base as a whole. In general, our new data confirms that adoption of online video is growing. But, except for Netflix, the frequency of use is not expanding. This is largely because consumers are going to online portals to view specific TV and movie content. The frequency of viewing online video will probably not increase until ‘must-see’ original online programming takes hold.”

Another key finding is that cable operators shed 2.5 million subs last year, with satellite and telco services making up the difference. In addition, more homes added premium channels in 2010 that dropped them. Plus, cable sports is valued significantly less than on-demand access to TV content or premium TV channels; as such, more sports will not protect against cord-cutting.