Less TVs in the US, is it the Economy or the Internet?

Samia Perkins - May 4, 2011
Less TVs in the US, is it the Economy or the Internet?

I am considered an oddity among some of my friends and family because I don’t have cable. I do have a TV, but I rely on DVDs, Netflix and my Roku player for my television viewing. When someone asks me if I’ve seen a commercial, I just smile and say “no”. In fact, my daughter (at 4 years old) was shocked the first time she watched Nickelodeon when the commercials came on. She had never seen one. But maybe my odd choice is becoming less odd. A new report by Nielsen shows that for the first time since 1992, there are less US households with television sets. To be sure, the vast majority of households still own TVs, but the percentage has gone from 98.9 percent to 96.7 percent. Part of the explanation is the economy, and the change to digital. But is there another explanation?

Nielsen’s latest report includes data from the 2010 census, as well as 50,000 Americans in the national sample. The data shows that many of those without TVs are households earning under $20,000, who also don’t have internet access. These are people whom the economy has hit hard, and who may not have been able to afford the upgrade to digital despite government subsidies. But there is another group, younger people who prefer to watch on their computers (and increasingly on tablets and phones), and who are opting not to buy a TV set. Instead, they watch TV and movies online.

I guess I don’t fit into the TV-less group, but my TV is just a screen that makes it easier for me to watch, as I would prefer not to watch on my laptop. I have no plans to get cable or a satellite dish anytime soon. Just not interested. Anything I really want to watch, I can do it online, and not having cable means I’m less likely to spend hours watching TV and am more selective about what my family watches. I suspect that point of view is unlikely to become mainstream, but I do think that the group of people who are willing to pay a premium price for cable is likely to shrink, especially as more and more content is available online, and is available immediately. Also, the rise of Smart TVs and set top boxes like the Boxee Box, Apple TV, and the Roku make watching internet content easier and more accessible (you don’t have to hunch in front of your laptop).

Nielsen is now looking at including internet video in their surveys, something that I think is already overdue. According to the report:

“While Nielsen data demonstrates that consumers are viewing more video content across all platforms — rather than replacing one medium with another — a small subset of younger, urban consumers seem to be going without paid TV subscriptions for the time being. The long-term effects of this are still unclear, as it is undetermined if this is also an economic issue that will see these individuals entering the TV marketplace once they have the means, or the beginning of a larger shift to online viewing.”

To further gauge interest in streaming, we have a poll running right now asking our readers their opinions on Smart TVs.

The vast majority, 46%, say they have no plans to buy one. Only 11% say that they have a Smart TV and use all the features. This is not really surprising, since most Smart TVs come with a premium price. Vincent Nguyen just reviewed the Samsung D8000, which sells for around $3500. It’s a beautiful TV with a great picture and amazing features, but priced out of the range of many. There are cheaper options, like the Sony Google TV for $999, and if you go the set-top box route, the cost is much lower, starting at $59 for the lowest-end Roku.

Kristine at Katharses.org has an interesting perspective, as after she got a $170 cable bill, stated weighing the cost of cable vs. the cost of cutting the cord and going with a Roku player. She found that she would save about $740 per year by dumping cable, which was enough to justify the switch, and even allowed for some extra purchases renting movies on Amazon.

I don’t see people giving up their TVs, the TV is still the center of the American living room, and TV ownership is well over 90% in the U.S. and likely to stay that way. But I can definitely see cable subscribership declining, and more people cutting the cord and watching via streaming. Paying for cable, or even satellite, is going to start making less sense as more options pop up for getting what you want when you want it, and for less. With Netflix now getting original content, and seemingly everyone getting into the content streaming game, namely Amazon Prime, YouTube, Hulu Plus, Epix HD, possibly Facebook, and most recently Warner Brothers, there is no question that online streaming is where content delivery is headed.

If Nielsen wants to stay relevant, they had best start studying internet TV viewing sooner rather than later, and if cable networks want to stay in business, they will need to step up their efforts to work with streaming companies like Netflix and others instead of trying to oppose them. I’m quite happy with my Roku and my Netflix subscription, and even with small kids, I don’t feel that I need Nickelodeon. My kids are fine with their DVDs, and watching the shows that are available via Netflix streaming. And I am happy with the choices I have watching on the Roku or on DVD. The one thing my husband and I sometimes miss is being able to watch live sports, especially football. But that isn’t enough for us to justify paying for cable. If I was more of a dedicated TV watcher, though, I might feel differently. So what do you think? Have you cut the cord yet? Would you? Or if you really love having cable, why would you hate to give it up?

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