Telecompetitor Arches

87% of U.S. Homes Buy Video Service, but Economy Could Drive Churn, Economizing

Despite growing threats of online competition, some 87 percent of U.S. households nationwide subscribe to some form of multichannel video subscription service, according to Leichtman Research Group.

That is up from 80 percent take rates in 2004. As you might suspect, income plays a part in non-adoption.

The mean annual household income of multichannel video subscribers is 53 percent higher than the household income of non-subscribers.

Nationwide, six percent of homes with annual incomes over $75,000 do not subscribe to a multichannel video service, compared to 12 percent with incomes of $30,000-$75,000, and 27 percent of homes with incomes under $30,000.

Of those figures, the perhaps increasingly-important number is the percentage of homes that can afford the product, who choose, for some reason, not to buy. There is a growing sense that many such households include younger Millennial consumers, who do not appear to have the same propensity to buy the service as older users tend to exhibit.

The findings are based on a telephone survey of 1,369 households from throughout the United States, and are part of a new LRG study.

The other issue is the impact a sluggish economy might be having. Some 42 percent of surveyed individuals agree that changes in the economy have negatively impacted their household in the past year.

About 39 percent of those negatively impacted by the economy agree that they reduced spending on TV, Internet, and phone in the past year.

Also, some 32 percent of those negatively impacted by the economy agree that they will likely reduce spending in the next six months.

About 16 percent of those negatively impacted by the economy report they are likely to switch video providers in the next six months.

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