Fans of hit HBO shows have long dreamed of the day when they can watch their favorite programs online without having to subscribe to an expensive cable bundle. While HBO has given no indication that it will ever sever ties with the cable companies that distribute its content, that could change if new trends flagged by the NPD Group keep accelerating.
Essentially, the NPD Group found that the percentage of Internet-using households that subscribe to a streaming service such as Netflix or Hulu Plus increased from 23% to 27% from March 2012 to August 2013 while the percentage that subscribed to a premium TV channel such as HBO or Showtime declined from 38% to 32% over the same period.
While this alone obviously isn’t enough to make HBO run screaming into Netflix’s arms, it could certainly put some added pressure on the company to make more of its shows available online to non-cable subscribers, especially if its shows keep getting pirated more than those of any other company’s by such a wide margin.
“As subscription video-on-demand (SVOD) services have gained momentum, it’s clear that some consumers are trimming their premium-TV subscriptions,” NPD Group analyst Russ Crupnick explains. “As SVOD increasingly strives to become a channel itself, viewers might consider it to be an adequate substitution for other premium channels, or perhaps they are switching to economize on their time and money spent.”
NPD’s press release follows below.
Cord Shaving? SVOD Subscribers Increase, as Premium TV Subscribers Decline, According to The NPD Group
SVOD makes up 67 percent of all digital video transactions, and it continues to grow faster than all other types of digital-video acquisition.
Port Washington, N.Y. (PRWEB) January 20, 2014
With questions about the new viewer behavior trend in premium TV: video “cord cutting” and “cord shaving” abounding, a new report from The NPD Group, a global information company, reveals that subscriptions to HBO, Showtime, and other premium TV channels have declined over the past two years, as Netflix and other subscription video-on-demand (SVOD) services have gained in popularity. There was a 6 percentage point overall decline in U.S. households subscribing to premium TV channels over the past two years, while households subscribing to SVOD grew 4 points.
According to NPD’s “The State of SVOD” report, 32 percent of U.S. households were subscribed to premium-TV channels in August of 2013, compared to 27 percent of U.S. households that subscribed to SVOD services. Netflix remains the clear leader in SVOD; however, Hulu Plus and Amazon Prime are reaping the biggest growth benefits in the category, as consumers tack on secondary SVOD services.
“As SVOD services have gained momentum, it’s clear that some consumers are trimming their premium-TV subscriptions,” said Russ Crupnick, senior vice president of industry analysis for The NPD Group. “As SVOD increasingly strives to become a channel itself, viewers might consider it to be an adequate substitution for other premium channels, or perhaps they are switching to economize on their time and money spent.”
Overall digital-video transactions rose 3 share points since 2012, reaching 70 percent of all home-video transactions in 2013. (NPD counts home-video transactions as purchases and individual paid rentals, not including free on-demand movies and TV shows included with a pay TV subscription.) In 2013 SVOD made up 71 percent of all digital-video transactions, and it continued to grow faster than all other digital acquisition types.
Data note: Information in this press release was derived from NPD’s report titled, “The State of SVOD,” which is based on data from NPD’s “VideoWatch Digital” consumer tracker (450,000 transactions) and “Video Omnibus Study” (7,500 respondents). Note: NPD counts home-video transactions as purchases and individual paid rentals, not including free on-demand movies and TV shows included with a pay TV subscription. Data is weighted to reflect the U.S. population aged 13 and older.