Multi-channel video services adoption has grown to record levels in the U.S. in recent years, though there are signs that growth in tapering off. Some 87% of U.S. households subscribe to some from of multi-channel video service, according to a recently completed Leichtman Research Group (LRG) survey, a level that while well up from 80% in 2004 is similar to that of the past two years.
There’s a large income disparity between households that subscribe to multi-channel video services and those that don’t. The mean annual household income of the former is 53% higher than that of non-subscriber households. Nationwide, 6% of households with incomes greater than $75,000 don’t subscribe to a multi-channel video service as compared to 12% with incomes between $30,000-$75,000. Twenty-seven percent of U.S. households with incomes below $30,000 don’t subscribe to one, according to LRG’s press release.
“The penetration of US households subscribing to a multi-channel video service has leveled off at about 87% nationwide over the past three years,” commented Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “The defining characteristic of those who do not subscribe to a multi-channel video service remains the level of household income. In addition, those facing economic challenges are most likely to switch provider, or reduce spending on services.”
Entitled, “Cable, DBS & Telcos: Competing for Customers in 2012,” other highlights of LRG’s research report include:
- Overall, 42% of individuals agree that changes in the economy have negatively impacted their household in the past year — down from 50% last year, 47% in 2010, and 44% in 2009
- 39% of those negatively impacted by the economy (8-10) agree that they reduced spending (8-10) on TV, Internet, and phone in the past year — compared to 18% of those less impacted (1-7) by the economy
- 32% of those negatively impacted by the economy agree that they will likely reduce spending in the next six months — compared to 12% of those less impacted by the economy
- 16% of those negatively impacted by the economy are likely to switch video providers in the next six months — compared to 8% of those less impacted by the economy
- Mean reported monthly spending on multi-channel video service is $78.63 — an increase of 7% from last year
- Multi-channel video subscribers with annual household incomes over $75,000 report spending 14% more per month than those with incomes under $30,000 — when non-subscribers are included, mean spending per household of all with incomes >$75,000 is 49% higher than those with incomes <$30,000