Is Network Content Streaming Affecting Pay TV Subscriptions?

April 18, 2013

This article is included in these additional categories:

Broadcast & Cable | Television

GfK-Network-Content-Streaming-Pay-TV-Service-Apr2013A new study from GfK has found that network content streaming now tends to cannibalize regular TV viewership of those programs, but does it have an effect on pay TV subscriptions? In other words, is the availability of network programs online contributing to cord-cutting and/or cord-slicing? According to separate results from the GfK survey, the answer is probably no. That is, 19% of streamers and downloaders in 2012 reported decreasing service (“cord-slicing”) in the past year, as opposed to 10% who reported increasing service (“cord-splicing”). But, those numbers are not significantly different from the general population.

Per the report, among the general public, 1 in 10 reported increasing their pay TV service, and 2 in 10 reported decreasing subscription levels. That indicates that network TV content streamers and downloaders on a net basis are decreasing their subscription levels, but that the availability of shows online may not be to blame, as the net decrease is similar to the general population.

Looking at cord-cutting (canceling service altogether), the report details that among consumers who are currently in homes without pay TV, 41% say they at some point had pay TV at that location and currently do not have it. While streamers have a higher-incidence of past pay TV service (48%, up from 39% in 2011), the researchers feel confident that they “can still conclude that viewing of network content via streaming video has not had any cord-cutting effect.” That, they argue, is consistent with past research suggesting that heavier TV users are heavier media users overall.

It may well be that cost is more of a factor in cord-cutting than the availability of content online. That position is supported by an unscientific poll by, along with research from GfK Media. Another indicator that cost is the prime culprit for TV cord-cutting comes from just-released research from Parks Associates. According to that study, 44% of customers who re-subscribed to pay-TV services in the past 18 months said a promotion (such as offering free or discounted premium channels) was a significant reason for their return.

About the Data: As with previous waves, the sample for GfK’s “TV’s Digital Connections” report consists of internet users age 13-54, with a total of 1,500 completed interviews. The survey was fielded from December 5 to 14, 2012; the average time to complete the survey was 15 minutes and the cooperation rate among the assigned sample was 41%.

The report is based on a quantitative survey administered to English-speaking persons from GfK’s KnowledgePanel® research panel. KnowledgePanel is unique in that it combines the capabilities of web-based interviewing with robust probability-based samples; it is representative of approximately 97% of US households.

Each survey was conducted during a similar time (November in 2006 through 2011 and early December in 2012), and asked about usage between September 1 and the time of the survey.

(Please note an important parameter of the study: it only covers use of “official” network digital assets, or use of video that “originated from a broadcast or cable television network.” Therefore, viewing of video on YouTube or other sites that are typically predominantly user generated does not necessarily apply to the streaming content measured here, unless it is from a network program. It also does not include use of unofficial websites””such as fan sites, blogs, or other content””that are not produced by the networks. This differentiation was deliberately made in order to focus on those assets that are under the control of the networks””those that networks control, sell advertising for, and for which investment decisions must be made.)

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