Nielsen Downplays Cord Cutting

According to Nielsen (NYSE:NLSN), traditional TV is still the preferred video platform globally. The research house says 26% of global online ...

According to Nielsen (NYSE:NLSN), traditional TV is still the preferred video platform globally. The research house says 26% of global online survey respondents said they pay to watch broadcast or VOD programming via subscription to an OTT provider such as Hulu, Netflix (NASDAQ:NFLX) or Amazon (AMZN), compared with 72% who said they pay to watch via a traditional TV connection.

Regionally, 35% of respondents in North America and 32% in Asia-Pacific indicated they pay an OTT provider for programming content. Self-reported usage in Europe came in at 11%. In Latin America and the Middle East/Africa, 21% of respondents in each region said they subscribe to OTT.

While 68% of respondents in the global online survey said they have no plans to cancel their existing traditional service in favor of an online-only service, 32% said they plan to cut the cord. Responses were highest in Asia-Pacific, where 44% of respondents indicated they plan to cancel their cable or satellite service for an online-only service. Some 24% of Latin American respondents indicated plans to cancel, followed by 22% in North America and 17% in Europe. However, according to a recent Nielsen study in the United States, only a very small percentage of those who expressed a desire to drop their multichannel cable and satellite TV service actually did so.

"The increasing popularity of online-only video services will continue to put pressure on networks and cable and satellite TV providers, but a substantial replacement of one for the other is unlikely," said Megan Clarken, president, Nielsen Product Leadership. "While some consumers are cutting back on traditional TV services, many aren't severing the cord completely. For most viewers, online and traditional services are not mutually exclusive, but complementary. Moreover, online-only services, networks and multichannel video-programming distributors face many of the same challenges, including rapidly evolving consumer preferences, an overabundance of choice and rising content costs. In the near term, cord shaving is likely the biggest threat as consumers evaluate the benefit of premium services or networks and consider slimmer channel packages that provide a better match for both preferences and wallets."

The Nielsen Global Video-on-Demand Survey polled more than 30,000 online respondents in 61 countries to gauge worldwide sentiment about VOD viewing and advertising methods. Some 65% of respondents in the online survey said they watch some form of VOD programming, including long- and short-form content.

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