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US multi-channel subscriptions ‘have peaked’

Nearly nine in 10 US households still subscribe to multi-channel video services, though subscription levels have peaked, new research suggests.

The Leichtman Research Group (LRG) says that 86% of US households subscribe to some sort of multi-channel video service. Penetration peaked at 88% in 2010 following the US digital switchover, increasing from 82% in 2005.

Multi-channel video providers reported a cumulative increase in subscribers of less than 1% over the past three years, says the research. But penetration fell slightly over the same time because of an increase in the number of rented homes.

The LRG research says that, of the TV households that don’t subscribe to a multi-channel video service, 40% subscribe to Netflix, 11% subscribe to Amazon Prime, and 7% subscribe to Hulu Plus. In total 42% of non-subscribers get at least one of these three OTT services – with 58% not taking any. Some 8% of TV households say they watch OTT TV only.

LRG president and principal analyst Bruce Leichtman said: “The penetration of households subscribing to a service is now below its peak. While some consumers continue to go in and out of the category, economic factors appear to be as a strong force in shaping this market as the emergence of over-the-top alternatives alone.”

The LRG findings were based on a telephone survey of 1,319 US households.

 Cable, DBS & Telcos: Competing for Customers 2013.

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