Ubiquity of Mobile Platforms Threatens Pay TV Subscriptions

According to Deloitte's sixth edition "State of the Media Democracy" survey, access to content is increasing American media consumption.

Movies are available on a wider array of platforms: home TV via cable, satellite, DVD, pay-per-view, Internet and online via streaming/downloading to a personal computer, gaming console, smartphone or tablet. As recently as 2009, only 28% of Americans reported streaming a movie; today, 42% report streaming.

In 2007, 37% of people said that they had not viewed a movie, available for purchase or rental, during the past six months. In 2011, that percentage of non-consumers dropped to only 19%. And, while only 23% of respondents preferred to be able to download their books, magazines and newspapers to a digital device in 2007, 36% now express interest in this option.

The survey found that 20% of leading Millennials (ages 23 to 28) have read their favorite newspaper in the last six months on a smartphone, up from 9% last year. 11% of leading millennials have also stated that this is their favorite method for reading the newspaper, up from 3% last year.

Phil Asmundson, vice chairman and U.S. media & telecommunications sector leader, Deloitte LLP, notes, "Consumers may be watching fewer cable shows and movies on TV, or reading fewer physical copies of books and newspapers, but they have not stopped consuming the content. They are simply watching or reading on different media or platforms."

As adoption of smartphones grows, Americans are beginning to use them as "all in one" devices for a number of different tasks. In 2011 the survey found increases in Americans using:

• Text messaging (up to 78% in 2011 from 71% in 2009)
• Mobile online search (46% in 2011 compared to 30% in 2009
• GPS for directions (37% in 2011 versus 22% in 2009)
• Online banking, tracked for the first time in 2011 (19%)

"As the costs for these types of devices, apps, and the wireless services that come with them continue to fall, consumers are starting to shift their behavior, taking advantage of connectivity, performance, and portability that rivals and often beats that of a laptop," said Asmundson.

Though using a DVR is the second-most preferred means of watching one's favorite TV show, says the report, Americans have already cut, or are exploring cutting their pay TV connection entirely.

The survey found that 9% of people have already cut the cord and 11% are considering doing so because they can watch almost all of their favorite shows online. An additional 15% of respondents said that they will most likely watch movies, television programs, and videos from online digital sources (via download or streamed over the Internet) in the near future.

But, concludes Asmundson, "In a world where consumers have other ways to access content...the DVR may (still) be an underutilized service...(since) the majority of Americans don't have a DVR in the home...could serve as a value-add for cable and satellite TV companies..."

(Source: The Center For Media Research, 01/19/12)