TV subscriptions drop as video streaming services rise

Streaming services, like Netflix, Amazon Prime, and Hulu, have grown 4 percent over the last two years, while TV channel subscriptions have declined by 6 percent.

Share of US households subscribing to subscription video-on-demand and premium TV services. The NPD Group

TV channels must be starting to feel the sting as more subscribers opt for video streaming services. New data from global information company The NPD Group shows that television channel subscriptions fell 6 percent in the last two years, while streaming services grew 4 percent.

It appears that with the ease and relative low cost of TV and movie streaming services, more people are canceling channel subscriptions like HBO and Showtime. According to The NPD Group, 67 percent of all digital video transactions are via subscription video-on-demand, or SVOD. This includes services like Netflix, Amazon Prime, and Hulu Plus.

"As SVOD services have gained momentum, it's clear that some consumers are trimming their premium-TV subscriptions," The NPD Group's senior vice president of industry analysis Russ Crupnick said in a statement. "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."

The networks, however, blasted the NPD study .

"The research is simply incorrect," said a representative for HBO and Cinemax, which are owned by Time Warner. Other pay-TV networks chimed in with the same sentiment to the Los Angeles Times.

A study by JP Morgan analysts in October found, like many polls before , that cord-cutting households are still in the minority, but a large proportion are on the fence. According to the study, 7 percent of TV watchers age 18 to 49 were "cord-nevers," people who have never paid to subscribe to a TV service. Ten percent were cord-cutters. And, a full 40 percent were what they termed "cord considerers," people who subscribe to pay TV and are somewhat or extremely likely to cancel.

This type of behavior change among subscribers is causing TV channels and cable providers to rethink their offerings. In October, Comcast offered a pay-television package that gave HBO Go to subscribers for a discount. While this looked like it could've signaled a move toward HBO Go breaking out on its own, it appears that is still a long ways off.

Updated on Wednesday at 11:24 am PT:To include a statement from HBO.

About the author

Dara Kerr is a staff writer for CNET focused on the sharing economy and tech culture. She grew up in Colorado where she developed an affinity for collecting fool's gold and spirit animals.

 

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