US consumers spending 7% more on pay-TV this year, despite downturn

A new report form Leichtman Research Group has found that the penetration of pay-TV services in the US has remained stable over the past two years, while average spending has actually increased from last year, despite continued problems with the country’s economy.

First the bad news: over 40% of US consumers told the research firm that changes in the economy have negatively impacted their households in the past year – down from 50% last year, 47% in 2010, and 44% in 2009.

Of those US households negatively affected by the economy, 16% report themselves likely to switch video providers in the next six months – compared to 8% of those who have been hit less hard.

However, despite these troubles, the percentage of US homes that subscribe to a multi-channel video service has now reached 87%, according to the report, which is similar to the past two years, and up from 80% in 2004.

Average reported monthly spending on multi-channel video service is currently US$ 78.63 – an increase of 7% from last year, estimates Leichtman. Subscribers with annual household incomes over US$ 75,000 report spending 14% more per month than those with incomes under $30,000.

“The penetration of US households subscribing to a multi-channel video service has levelled off at about 87% nationwide over the past three years,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group.

“The defining characteristic of those who do not subscribe to a multi-channel video service remains the level of household income. In addition, those facing economic challenges are most likely to switch provider, or reduce spending on services.”

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