The figures should serve as a warning to cable companies and their rivals providing fiber-to-the-home service. Their futures are being shaped by the trend among people who watch programs primarily or mostly on their PCs. 5% of all of those surveyed, and 12% of those 18 to 34 watch programs mostly on their computer. 3% of those surveyed watch television primarily on their computer. However, the number of those who watch television primarily on their computer goes up to 7% among the 18 to 34 age group. Among those 55 or older, the number is only 1%.
The trend towards online consumption of television programs is underscored by the fact that 36% of people get their news all the time or at least occasionally from cable TV websites. Many of these people do not watch cable or broadcast shows via traditional means at all. 28% of those polled have increased their use of online news and information sites. Only 17% have increased their viewership of cable news and only 14% have increased their viewership of broadcast news.
The 24/7 Wall St/Harris Poll On American Media shows a shift in people’s viewership habits between cable television and traditional broadcast networks, but this does not alter the fact that the delivery medium has begun to change. 51% of those polled believe that cable programming is of higher quality than network television shows. That may be good for cable, but only if it can capture people who are willing to pay for content as they move online.
The cable and fiber-to-the-home companies face a future of mixed blessings. People will use their infrastructure for access to content viewed on the PC. These companies will be paid for their broadband delivery. They must face the fact that these broadband customers may not, in many cases, be willing to pay for premium cable channels or video-on-demand. Broadband fees may rise, but premium content fees are likely to fall.
The use of the PC as a medium to consume video programming is in its infancy, but younger Americans have already begun to adopt it. The struggle for these consumers has already started to take place. Hulu, the large premium video content site which has deals with networks and studios, places video advertising in its programs. The site has also begun to sell premium services for consumers who want to view some programs that Hulu has elected to put behind a “pay wall.” Hulu appears ready to slash what it charges for that service, a sign that the method has not been readily accepted.
Other large video websites like YouTube and the online sites for the networks like MSNBC.com have also begun to attempt to get viewers to pay for programs. None of them has boasted that they have been highly successful.
The one experiment for charging for premium content over the internet is Netflix which has a large and successful streaming service. A growing number of Netflix customers elect to stream movies instead of ordering them over CD. The Netflix model may be the future of premium video. Its customers are willing to pay for internet delivery of video in lieu of paying for the same programs delivered through paid cable of satellite TV.
The trend toward internet-delivered video content has begun to grow. So far, the model that appears to work best for delivering premium content is employed by Netflix. Cable network companies may want to find alternative means of making money, because, as these numbers clearly show, their core business is eroding.
This 24/7 Wall Street/Harris Poll was conducted online within the United States from October 8-12, 2010 among 2,095 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the general population on key variables including age by sex, race, region, education, and household income.
Propensity score weighting was also used to adjust for respondents’ propensity to be online.
All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words “margin of error” as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.
Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in the Harris Interactive panel, no estimates of theoretical sampling error can be calculated.
-Douglas A. McIntyre
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