Pike & Fischer | Broadband Advisory Services

A deepening recession has raised questions concerning the fate of the multichannel video market, as free and low-priced online content is hyped as a major threat to linear television programming and cable operators' video-on-demand and DVR services. In a just-completed consumer survey, Pike & Fischer has found that consumers have no plans to cut back their spending on multichannel video services this year, although many are opting against buying premium packages or VOD movies. Households that reported watching Web-based video on a regular basis were in fact the most likely respondents to say they will keep their traditional multichannel video service. This report details our survey findings, including a variety of demographic information about Web video usage, and provides an outlook on how cable operators are responding to the rise of online video. Twenty-one tables and charts are included. Companies covered in the report include Hulu, Veoh, Apple, Netflix, Google, Verizon, AT&T, Time Warner Cable, and Comcast.

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TABLE OF CONTENTS

Introduction
History of Web Video
Market Conditions
Survey Results

Consumer Plans for TV Service
Outlook

TABLE OF FIGURES

Figure 1: Online Video Landscape, 2004
Figure 2: Online Video Landscape, 2009
Figure 3: Most Trafficked Online Video Sites, February 2009
Figure 4: Multichannel Video Customer Growth (000)
Figure 5: High-speed Internet Net Additions
Figure 6: Respondents by Age Group
Figure 7: Respondents by Location Type
Figure 8: Respondents by Annual Household Income
Figure 9: Respondents by Living Situation
Figure 10: Respondents by Educastional Attainment
Figure 11: Respondents by Broadband Service Type
Figure 12: Types of Video Watched
Figure 13: Preferences on Digital Formats
Figure 14: Online Video Viewing by Age Group
Figure 15: Online Video Viewing by Location Type
Figure 16: Online Video Viewing by Living Situation
Figure 17: Online Video Viewing by Income Level
Figure 18: Online Video Viewing by Education Level
Figure 19: Web Video Users by Internet Connection Type
Figure 20: Web Video Viewing by Digital Format
Figure 21: Consumer Plans for Video Service This Year

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Most Americans Plan No Cutbacks to Pay TV Subscriptions in 2009, Despite Recession

Silver Spring, MD—Fears that the recession will encourage more and more people to drop cable or satellite TV service and rely on free online video services appear to be exaggerated, results from a new nationwide survey indicate.

Nearly 70 percent of consumers responding to the survey, sponsored by market research provider Pike & Fischer, said they plan to keep their current cable or satellite TV service this year. Only two of the 600 respondents to the survey, conducted in March, said they plan to drop their multichannel video service to cut household expenses.

However, nearly 15 percent of respondents said they intend to downgrade to a lower-priced video subscription this year, through such means as giving up premium channels. Only 8 percent of respondents said they plan to upgrade their service to receive expanded numbers of channels or advanced services such as high-definition TV.

Although there are no signs yet that the Web is on its way to replacing traditional TV, a substantial number of respondents said they are turning to the Web to watch video. About 32 percent of respondents to the survey said they regularly watch video from Web sites such as YouTube and Hulu.

“The results indicate that consumers appear to be willing to continue paying for cable or satellite TV, despite the fact that they can get a vast amount of shows for free or very low cost on services like Hulu and iTunes,” said Scott Sleek, director of P&F’s Broadband Advisory Services. “But they don’t appear to be willing to spend any extra money for premium channels or on-demand movies. And they’re increasingly willing to go to the Internet to watch their favorite shows.”

Results of the survey are detailed in a new Pike & Fischer report, Web Video Usage: A Consumer Survey, priced at $995 and available for purchase at www.broadbandadvisoryservices.com. For analyst commentary or to request a briefing, contact Scott Sleek at 301-562-1530 x291 / ssleek@pf.com.

Pike & Fischer, a BNA Business, offers a host of legal and business products covering the telecommunications industry. For information about Pike & Fischer’s Broadband Advisory Services, visit www.broadbandadvisoryservices.com or contact Jonathan Wentworth Ping at 973-718-4703 / jping@pf.com.

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Scott Sleek

Scott Sleek, Director of Pike & Fischer's Broadband Advisory Services, oversees the day-to-day operations of our market research services and leads the development of analytical publications and briefings. As part of his duties, Scott serves as Managing Editor of our online newsletter Broadband Daily. Scott also oversees the development of all Research Reports & Briefs and manages the Trackers & Projections database. He regularly tracks subscriber growth, market penetration and revenue growth in the markets for high-speed Internet, packet-switched telephony, interactive TV, wireless data and other forms of broadband communications and entertainment. Scott also fields all requests for customized research and works closely with customers to fulfill their market data and analysis needs. Scott has more than 20 years of experience as a writer, editor and researcher. Contact Scott at 301-562-1530, x291 / ssleek@pf.com.

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Web Video Usage: A Consumer Survey