Streaming Video on the Rise as Premium Channels See Subscriptions Fall

IT Management

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Though cable companies are still dragging their feet, it is now clear that streaming video is the future of television. Subscriptions for streaming video services such as Netflix and Hulu are rising fast and hardware manufacturers are preparing to flood consumer markets with internet-connected video devices in the coming years. The WWE, of all organizations, has just paved the way for sports organizations to take their programming directly to consumers through a streaming subscription service.

Market research firm NPD Group today released a new report showing that the percentage of U.S. internet households subscribing to premium TV channels such as HBO and Showtime declined to 32% as of August 2013, down 6% from the 38% of households that subscribed back in March 2012. At the same time streaming video subscriptions (what NPD refers to as subscription video-on-demand services) for those same households rose 4% from March 2012 to hit 27% as of last August.

According to the report, subscription video-on-demand (SVOD) services made up a full 71% of all digital-video transactions during 2013. The segment is now the fastest-growing type of digital acquisition according to NPD's numbers.

“As SVOD services have gained momentum, it’s clear that some consumers are trimming their premium-TV subscriptions,” said Russ Crupnick, SVP of industry analysis at NPD. “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.”