Non-Cable OTT Homes up 23% Since Last Year

For those who believe the television landscape is largely fixed, here's an interesting bit from a recent Nielsen study - there are indeed, in Nielsen's words, "changes afoot". Specifically, there were 22.8% more TV households with broadband Internet connections but without subscription multichannel television service (they have free broadcast TV). As Nielsen notes, the group is still very small, only 4.5% of households. However, that's a growth rate worthy of attention by all of us in the television business.

Cord-Nevers are a Bigger Issue than Cord-Cutters

Steffan Anninger of Credit Suisse, as reported in The Hollywood Reporter, made an interesting and perceptive point about the impact of competition from over-the-top video on the multichannel subscription business. Over-the-top video will likely have a much bigger impact on new subscribers choosing not to sign up than it will on current subscribers dropping the service.

Over-the-top video follows the classic example from The Innovator's Dilemma (hat tip, Lost Remote)-- it is not a good substitute for current multichannel video customers (relatively poor picture quality, no household brand cable networks, poor integration with broadcast signals, clunky channel surfing). It does have a few advantages: very cheap, inherently multiplatform and very open to new programmers. Something in that combination may make it attractive to a niche, "foothold" market from which it can expand out with more refined later versions, typically supported by improving technology. Cable-nevers may be that foothold market.