Report: 10% of U.S. households to ditch pay TV in favor of Internet video by 2015

About 4 percent of U.S. households, or 4.5 million homes, will have said goodbye to cable, satellite or telco TV in favor of Internet video options by the end of 2011, says a new report from SNL Kagan.

"Though the thin slice of households relying [on over-the-top] substitution could be dismissed as evidence of a lack of momentum behind cord cutting, the 4.5 million households it represents are not inconsequential, particularly in light of the basic subscriber declines for the cable industry," the firm wrote in a report.

The firm predicts that multichannel substitution via over-the-top delivery will expand from 2.5 million households at the end of 2010 to 12.1 million by 2015--representing 10 percent of all households. 

SNL Kagan believes the penetration of traditional pay TV services may have peaked in 2009. By the close of 2010, the firm estimates that 84.9 percent of the occupied U.S. households subscribed to a multichannel package, representing a decline from nearly 86 percent at the end of 2009.

The firm also estimates that growth in the pay-TV market will continue but the pace isn't "expected to keep up with occupied household formation, leading to a long-term decline in penetrations for multichannel services."

For more:
- see this Multichannel News article

Related articles:
Good news, bad news: Bundles attracting pay TV subscribers
Cable subscriptions down, telco up in latest SNL Kagan data
Report: OTT to chip away at pay TV premium services