U.S. pay TV operators are believed to have slightly added to their video subscriber base in 2012. But the number of homes not subscribing to pay-TV services has risen to 5 million as of the fourth quarter, Nielsen said Monday.
Research firm SNL Kagan said Monday is expected to report its pay-TV subscriber data for 2012 soon. Analysts expect it to once again show a slight absolute gain in users, but another dip in pay-TV penetration, continuing a trend of recent years.
Nielsen said that slightly more than 5 million homes didn't subscribe to pay-TV services and didn't view over-the-air TV as of the end of 2012, up from 3 million in 2007. Its data also showed that the number of pay-TV homes declined by 1.1 percent to 102.3 million.
The second and third quarters of 2010 had been the first-ever quarters to show a decline in U.S. pay-TV subscribers, kicking off a debate about "cord cutters" and "cord nevers," or people who start a household with no interest in pay TV.
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Nielsen in its "Fourth-Quarter 2012 Cross-Platform Report" called the 5 million households without traditional TV set-ups "zero-TV" homes. They account for just less than 5 percent of the nation's total households.
"Most people watch TV in their living rooms using traditional cable or satellite options," the research firm said. "In fact, more than 95 percent of Americans get their information and entertainment that way. But as we explored what the other 5 percent are doing, we found some interesting consumer behaviors that we want to keep an eye on. This small group of video enthusiasts is tuning out traditional TV - and the trend is growing."
But Nielsen emphasized: "These households don’t fit Nielsen’s traditional definition of a TV household, but they still view video content." Or as the title of its online summary of the report said: "Zero-TV Doesn't Mean Zero Video." Nielsen has said it wants to better track non-traditional video viewership.
About 75 percent of these people do have at least one TV set, but they don't subscribe to pay-TV services and also don't use over-the-air TV, but about two-thirds stream content from the likes of Netflix on their sets. Others watch online TV content via computers, tablets and smartphones.
Nielsen said that 36 percent of them cite the cost of pay-TV services as the main reason for not subscribing, with 31 percent citing a lack of interest. However, 18 percent said they would be open to subscribing to pay-TV services in the future.
As widely believed, the avoiders of traditional TV are skewing younger. About 44 percent of the "zero-TV" group are under the age of 35, and 41 percent of them live alone, with around 80 percent having no kids, according to the Nielsen data.