For the last year, top cable television industry executives have dismissed the idea that consumers are cutting the cord and opting to get their content online.
But it turns out they're right. Consumers are cutting the cable TV cord, but not for the Internet. Instead they're signing up with satellite operators and phone companies offering the same services.
According to a new study released by Nielsen, the media research company that tracks television viewing trends, 91% of U.S. TV households had a subscription service in the first quarter of 2011. Of the total households, 53.8% had cable subscriptions, while 30.2% had satellite television and 6.7% used a service from a telephone company such as Verizon FiOS. The rest didn't subscribe to any TV service. That is about flat with the first quarter of 2010. However, both satellite and telecom video distribution services saw growth, while cable fell by almost 2%.
Although that 91% figure is reassuring to multichannel video programming distributors, there are clouds on the horizon.
The Nielsen study warns that younger Americans are spending an increasing amount of time watching content online. Children ages 12 to 17 spend a third of their time on the Internet watching video. The largest group watching content online are adults 35 to 49. By ethnicity, Asians watch far more video online than do whites and other ethnic groups.