49 million U.S. homes have a TV connected to the internet

49 Million U.S. Internet Homes Now Own a Connected TV or Attached Content Device, According to The NPD Group

• As Streaming Video Content Surges, U.S. Connected TV Household Penetration Increases 14% Year-Over-Year

PORT WASHINGTON, NY — More than half (52%) of all U.S. Internet homes have at least one TV connected to the Internet, representing an increase of six million homes over the past year, according to The NPD Group Connected Intelligence Connected Home Entertainment Report.

Base: U.S. Internet households
Devices are connected to the Internet, not just capable.
Source: The NPD Group/Connected Intelligence Connected Home Entertainment Report

While the types of devices being used to connect these televisions to the Internet are varied (video game consoles, streaming media players, Blu-ray disc players, and the TVs themselves), the average connected TV home had nearly three (2.9) devices installed that they could use for programming from apps on their televisions.

These numbers are in lock-step with the macro-level rise in the number of connected devices* Americans own. In examining the entire connected device landscape, there are now 734 million in use within U.S. Internet homes, averaging 7.8 connected devices per home. This represents an increase of 64 million installed and Internet-connected devices over the past year. This momentum is, in part, being driven by the increased adoption of Internet-enabled televisions and streaming media players as well as the increased availability of streaming video content.

“Ownership of connected televisions and streaming media players is accelerating while the availability of streaming content is simultaneously expanding. These combined forces will continue to drive increased adoption of connected devices within U.S. households,” stated John Buffone, executive director, Connected Intelligence. “At the same time, as the number of households that have access to apps on TVs rises, so too do the business opportunities for content owners and distributors.”

Methodology

More than 5,000 U.S. consumers, ages 18 and older, were surveyed during Q4 2015. Connected TV, streaming media player, and tablet ownership survey results were calibrated to life-to-date unit sales from the NPD Retail Tracking Service.

* Total connected devices include laptops, desktops, smartphones, tablets, connected TVs, video game consoles, Blu-ray disc players, streaming media players, and iPod Touch. The number of installed and Internet-connected devices includes those that deliver broadband applications and must actually be connected to the Internet.

US pay-TV continues to lose subscribers

The thirteen largest pay-TV providers in the US, representing about 95% of the market, lost about 385,000 net video subscribers in 2015.

According to the Leichtman Research Group this compares to a loss of about 150,000 subscribers in 2014, and a loss of about 100,000 subscribers in 2013.

The top pay-TV providers account for 94.2 million subscribers — with the top nine cable companies having over 49.0 million video subscribers, satellite TV companies about 33.7 million subscribers, and the top telephone companies nearly 11.5 million subscribers.

“2015 marked the third consecutive year for pay-TV industry net losses, yet the total number of subscribers for major pay-TV providers (including DISH’s Sling TV) has declined by less than one million since the industry peaked in 1Q 2012,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.

“2015 also saw significant shifts for cable and Telco providers. The top cable providers cumulatively had their best year since 2006, and had about 870,000 fewer losses than in 2014. Telcos had about 1,170,000 fewer net additions than in 2014, and had their worst year since they began providing video services in 2006.”

Other key findings include: The top nine cable companies lost about 345,000 video subscribers in 2015 – compared to a loss of about 1,215,000 subscribers in 2014; Top cable MSO losses were the fewest in any year since 2006.

Satellite TV providers added 86,000 subscribers in 2015 (including gains from DISH’s Internet-delivered Sling TV) — compared to a gain of 20,000 in 2014; Not including gains from Sling TV, DBS providers lost about 450,000 subscribers in 2015.

The top telephone providers lost 125,000 video subscribers in 2015 – compared to a gain of about 1,050,000 net additions in 2014; Telco net adds in 2015 were the fewest in any year since the services started in 2006.

In 4Q 2015, the top pay-TV providers added about 110,000 subscribers – compared to about 90,000 in 4Q 2014.

Top cable MSOs added about 125,000 subscribers in 4Q 2015 – their first quarter for net video additions since 1Q 2008.

DirecTV net adds of 214,000 subscribers in 4Q 2015 were higher than in any quarter since 4Q 2010
AT&T U-verse lost 240,000 subscribers in 4Q 2015 – compared to a gain of 73,000 subscribers in 4Q 2014.

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One-third of US households will have 4K TVs in 2019

Thursday, December 10th, 2015 

One-Third of US Households Will Have 4K TVs in 2019, IHS Says

• The United States leads Western Europe, followed by China, while Japanese household penetration will be comparatively low

TOKYO, Japan — Ultra-high definition (UHD) 4K LCD panels have recently experienced steep price declines, allowing 4K TV set prices to fall significantly and increasing consumer adoption and household penetration. By the end of 2017, most 50-inch-and-larger TVs worldwide will feature 4K resolution, according to IHS Inc. (NYSE: IHS), the leading global source of critical information and insight. With its comparatively strong economy and consumer penchant for large-screen TVs, 4K TV household penetration in the United States will reach 34 percent in 2019.

According to the latest information from the IHS TV Sets Intelligence Service, 4K TV household penetration in the European Union is expected to reach 25 percent in 2019. Growing availability of UHD content from Internet and pay-TV providers will support this trend. Switzerland is expected to reach 32 percent penetration in 2019, followed closely by the United Kingdom at 31 percent.

While Japan is a developed premium TV market, only 14 percent of all households are expected to have a 4K TV in 2019, because most households already have relatively new TVs. Domestic TV demand swelled to more than twice its normal level between 2009 and 2011, when the Japanese government ran an eco-points subsidy program for energy-efficient products and there was a nationwide analog TV switch-off.

“With the Japanese consumer preference for smaller TV screens, it will be more difficult for 4K TV to expand its household penetration in the country, even though UHD broadcasts are set to begin in 2018, in the run up to the Tokyo Olympic Games in 2020,” said Hisakazu Torii, senior director of consumer device research for IHS Technology.

Unlike Japan consumer adoption of 4K TVs in China is expected to be relatively high, with household penetration reaching 24 percent in 2019. In other emerging countries, where many households either have smaller LCD TVs or CRT TVs, 4K penetration will be lower: 11 percent in Russia, 8 percent in Brazil and 2 percent in India.

The IHS TV Sets Intelligence Service includes shipment and revenue data, average prices, average screen sizes and shipment area across 80 countries. All metrics in the database are further split by manufacturer, display type and resolution.

14% of US homes plan to buy streaming media player

14% of US broadband households plan to buy a streaming media player by midyear 2016 and that, as of the third quarter of 2015, 31% of US broadband households currently own a streaming media player, up from 27% at the beginning of the year.

“Streaming media players will be a popular gift this holiday season, especially with more competitive pricing in the market and the expansion of new OTT services” said Barbara Kraus, director of research, Parks Associates.

“With the popularity of the category, it has now divided into two tiers – basic and premium models. Consumers who want basic content streaming will gravitate to streaming media sticks such as the Google Chromecast and Amazon Fire TV due to their lower costs, which also make them good gift options. Cube-shaped players, like the Roku 4, Nvidia Shieled, and the latest generation of the Apple TV, are premium players, with more features, such as 4K streaming and more internal storage, but still with a much lower price tag than a new smart TV or connected gaming console.”

“In 2016, streaming media players will differentiate their models and brands through additional features, such as content options or new technologies like 4K,” Kraus said.

“Ultimately consumers want a simple, uninterrupted experience in accessing OTT content, so that will be the minimum expectation for any device, regardless of the cost.”

Previous research from Parks Associates shows that two-thirds of U.S. broadband households connect at least one device to the Internet. Among these households, a Microsoft Xbox is the most commonly used CE device for streaming at more than 14%, followed closely by Sony PlayStation at just less than 14%. Roku is third at 10%, surpassing brands such as the Nintendo Wii, Samsung, and Google in consumer usage when accessing online video content.

83% of U.S. households subscribe to a pay TV service

Decline in Penetration Over Time not Solely Caused by Those Leaving the Category

DURHAM, NH — New consumer research from Leichtman Research Group, Inc. (LRG) finds that about 83% of all households nationwide subscribe to some form of pay-TV service. The percentage of households that subscribe to a pay-TV service is down from 87% in 2010, but up from 81% in 2005.

While the total number of subscribers for the top pay-TV providers at the end of 2Q 2015 is similar to the total at the end of 2Q 2010, over the past five years, the US Census Bureau reports that occupied housing in the US increased by more than 4.5 million units (with all the growth coming in renter-occupied housing). As a result, penetration of pay-TV in residential households has decreased from five years ago.

Among TV households that do not currently subscribe to a pay-TV service, 17% paid for a service in the past year, while 70% of non-subscribers last subscribed over three years ago, or never subscribed to a pay-TV service. Overall, about 2.5% of TV households paid to subscribe to a service in the past year, but currently do not — compared to 1.5% in 2010, and 2.3% in 2005.

These findings are based on a telephone survey of 1,222 households nationwide and are part of an LRG study, Cable, DBS & Telcos: Competing for Customers 2015. This is LRG’s thirteenth annual study on this topic.

Other related findings include:

• In households using a TV, 12% of home owners do not subscribe to a pay-TV service — compared to 23% of renters (renters are more likely to be non-subscribers than in any year since 2006)
• 21% of those who moved in the past year do not currently subscribe to a pay-TV service — compared to 12% in 2010
• 35% using one TV set at home are non-subscribers — compared 10% using two or more TVs
• Mean reported monthly spending on pay-TV service is $99.10 — an increase of 39% since 2010
• 63% of non-subscribers get a subscription video on-Demand (SVOD) service, and 62% have an over-the-air (OTA) TV antenna
• In total, 5% of all households are pay-TV non-subscribers with both an SVOD service and an OTA antenna — while 4% of all households are pay-TV non-subscribers with SVOD but no OTA antenna.

“Changes in the dynamics of the pay-TV industry are not driven just by those exiting the category, but also those coming into the category,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “Historically, consumers have gone in and out of the pay-TV category, primarily for economic reasons. While the rate of those leaving is actually similar to a decade ago, those who are entering or reentering the market has decreased over time, and the industry is not keeping pace with rental housing growth.”

Record pay-TV subscriber losses in US

SNL Kagan estimates the US cable, DTH and IPTV platforms collectively shed more than 600,000 video subscribers in the three months ended June 30, falling to 100.4 million combined residential and commercial subs at mid-year.

The slide, which follows an uncharacteristically weak first quarter, points toward the likelihood of a much larger decline for full-year 2015 than the industry produced between 2010 and 2014, during what could essentially be seen as a period of general malaise.

The second-quarter crater was the product of a dramatic softening in the IPTV video sector, combined with an accelerated drop in DTH subscribers along with cable’s persistent decline. While cable sub losses slowed, they remain by far the greatest source of downward pressure on multichannel subscriptions. Speculation swirls around the decline in DISH Network subscribers coinciding with the promotion of the provider’s alternative Sling TV OTT offering, but the estimated loss from DISH was compounded by a decline at DIRECTV to drive the satellite total lower.

Cable’s basic-subscriber losses, at 350,000, came in at their lowest level since 2008, when the segment shed 211,000 basic video customers in the seasonally weak period. For perspective, from 2009 through 2014, second-quarter net losses averaged 609,000.

The telcos increasingly appear to be trading subscriber gains for improved financials. AT&T’s U-verse has aligned its strategy with DIRECTV’s focus on profitability. As a result of the belt tightening, the combined multichannel video subscribers served by FiOS and U-verse were flat at 11.7 million at the end of the second quarter, behind net adds of just 4,000.

The DBS segment lost an estimated 304,000 subscribers, as DIRECTV and DISH Network both reported record declines. The DBS segment retreated to just under 34 million subs. (The DBS figure has moved from a reported total to an SNL Kagan estimate as DISH changed its financial reporting.)

Traditional pay TV uptake remains resilient in US

Wednesday, January 15th, 2014 

Traditional Pay-TV Uptake Remains Resilient, Though Usage Lower among Younger Adults

• Millennials Less Likely to Use Incumbent Pay-TV Services

PLANO, TX — According to data released by The Diffusion Group, nearly nine in ten adult broadband users in the US subscribe to an incumbent pay-TV service such as cable, satellite, or telco-TV. The use of such services is greatest among adults 35 and older and less among younger adults.

“The notion that we’re on the edge of a ‘mass exodus’ from incumbent pay-TV services to online substitutes is not supported by the data,” notes Michael Greeson, co-founder of TDG and director of research. “Today, 88% of adult broadband users subscribe to an incumbent pay-TV service, a rate that has held relatively steady for the last 12 months.”

That noted, says Greeson, specific differences in subscription rates by age are worthy of attention. For example, legacy pay-TV subscription rates among Early Millennials (ages 25 to 34) are 82%, compared with 85% among Late Millennials (ages 18 to 24). In both cases, this is notably lower than use among those 35 and older.

“Millennials are quantum consumers raised in a world where online, on-demand video sources came of age, so we would expect uptake of legacy services to be a bit lower,” notes Greeson. “That said, until a legitimate virtual operator emerges capable of offering a competitive alternative to traditional pay-TV services, most Millennials will continue to subscribe to a legacy service.”

Nonetheless, it is imperative that pay-TV operators execute on their promises to deliver the types of video experiences desired by younger consumers. As well, and regardless of age, operators must find creative ways to balance evolving needs with inevitable price increases due to the accelerating value of quality video content.

As part of TDG’s continued focus on the connected consumer and the evolving broadband video space, TDG recently published TV Viewing in the Age of Quantum Video, an examination of the TV behavior of adult broadband users in relation to the frequency of using net-to-TV platforms to view various content types and sources. TV Viewing in the Age of Quantum Video is currently available for TDG Members to download. To purchase, or for more information about this new report, please contact our Research Services team.

IPTV defies drop in US pay TV market to gain subscribers in Q2

Amid a plunge in subscribers for cable and satellite providers, Internet Protocol Television (IPTV) was the only segment of the U.S. pay-TV market to achieve growth in the second quarter, according to a new Television Intelligence report from IHS Inc., a leading global source of critical information and insight.

The U.S. IPTV providers—represented by AT&T Uverse and Verizon FiOS—boasted a net addition of 398,000 during the April to June period, up from 304,000 in the second quarter of 2012. Nonetheless, the overall U.S. pay-TV market also shed 352,000 subscribers during this time.

The main culprit for the pay-TV market’s nosedive was the cable segment’s loss of 588,000 subscribers. While that was slightly better than the 598,000 customers that cable shed during the same time last year, the decrease still represented a major plunge for the embattled business. Meanwhile, satellite’s decline widened to 162,000 subscribers, up sharply from 62,000 a year ago.

Based on the number of total subscribers at the end of the period, cable clung to 55 percent of the U.S. pay-TV market, satellite held 34 percent and IPTV had an upwardly mobile share of 11 percent.

Of the three segments in the U.S. pay-TV market, the IPTV sector is enjoying the strongest growth, especially in urban areas where it is luring subscribers away from satellite. In particular, satellite’s lack of a true high-speed Internet service or a triple-play bundling option puts it at a disadvantage when competing against IPTV and cable. Cable, meanwhile, has its own problems, including disagreements between operators and content providers over rising programming costs that squeeze cable customers in the middle.

The recent tiff between CBS and Time Warner over carriage fees—with CBS going black on Time Warner and the cable giant’s subscriber base then getting locked out of CBS programming—demonstrates the kind of difficulties that cable could endure in the future.

US subscribers tune out pay-TV

The internecine fight among the three rival segments is particularly acute because the overall base of potential new subscribers is diminishing over time. The decline in the second quarter means that the total number of U.S. pay-TV subscribers will contract by 146,000 during the initial six month of the year, the first time ever that the industry began the first half of a year with a net loss in pay-TV customers.

More significantly, 2013 is set to mark the first year that there will be an annual decline in total U.S. pay-TV subscriptions, IHS projects. Subscribers are forecast to decline to 66 million, down from 67 million last year.

The market’s downshifting can be traced in part to the growing number of so-called “cord-nevers”—i.e., those who object to ever having a pay-TV subscription, and instead get their TV programming exclusively via over-the-top services like Netflix or through other sources. Equally as important, the price of a typical pay-TV subscription remains high, staying well out of reach for a large number of consumers. Confronted with economic choices, consumers prefer to keep their cellular and high-speed data service rather than a pay-TV subscription.

IPTV becomes must-see TV

Both AT&T and Verizon, however, appear to be bucking the trend of a shrinking customer base. AT&T’s Uverse attracted 233,000 new subscribers in the second quarter, its second-largest sequential increase since 2009. Verizon’s FiOS, meanwhile, showed it had plenty of room for growth by gaining 140,000 new subscribers. Already, Verizon has achieved a 50 percent penetration rate in the pay-TV market of Dallas, Texas, its first area of launch.

Diversify or die

For their part, both cable and satellite—bleeding from customer defections or non-renewals—are exploring opportunities to diversify services, including new paradigms to deliver content to the home and even completely new fields like home-monitoring services.

For instance, DirecTV, which lost 84,000 customers in the second quarter, will be the latest pay-TV provider to offer services related to home security via a recent acquisition engaged in that market. Home security ostensibly will provide a new revenue stream, offering significant upselling opportunities that come in the presence of a video installation.

Other potential revenue boosters for cable and satellite providers include the “TV Everywhere” solution that allows content to also be accessed on computers, smartphones and tablets; and initiatives like Cox Communications’ flarewatch, the first pay-TV-owned broadcast-delivered IPTV service.