Netflix Drives New Video Services, But Cord Cutting Remains Rare (Survey)

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NEW YORK -- Netflix has been driving the use of emerging video services over the past year, but few consumers are cutting the pay TV cord, according to a survey from Leichtman Research Group.

It found that 30 percent of U.S. households have at least one television set connected to the Internet via a video game system, a Blu-ray player and/or the TV set itself, up from 24 percent a year ago.

Ten percent of adults now watch video from the Internet via one of these devices at least weekly - double last year's figure. "This increased usage is heavily driven by Netflix subscribers, with 30 percent of Netflix subscribers watching video from the Internet via one of these connected devices weekly, compared to 3 percent weekly use among all non-Netflix subscribers," Leichtman said.

Its survey found that 12 percent of adults use Netflix’s Watch Instantly feature weekly, triple the 4 percent who said so last year. Among Watch Instantly customers, 77 percent use it to watch movies and TV shows on a TV set, while 60 percent say they access Netflix via a video game console.

However, only 0.3 percent of the survey sample dropped a multi-channel video service over the past year, do not plan to subscribe again in the next six months and say that they don’t subscribe because they can watch all that they want on the Internet or in other ways. Most of these respondents say that they would have dropped service to save money regardless.

“The use of emerging video services rapidly increased over the past year, with Netflix being the key driver of this growth,” said Bruce Leichtman, president and principal analyst for Leichtman Research. "Even with this growth in emerging video services, this isn’t creating a significant trend in consumers ‘cutting the cord’ to multi-channel video services – including cable, satellite and telco video services."

He added that there was "little difference" in the intent to switch or disconnect service from prior years.

Leichtman surveyed 1,287 households nationwide.

Among its other findings:

* 20 percent of multi-channel video subscribers are likely to reduce their spending in the next six months. However, Netflix subscribers, online video users and premium subscribers are as likely as others to reduce spending.

* Adults watching TV shows online weekly amount to 12 percent, compared with 11 percent last year.

* 23 percent of households have a video game system connected to the Internet, 10 percent have an Internet-connected TV set, and 7 percent have a Blu-ray player with an Internet connection.

* Among mobile phone owners, 15 percent watch video on their phones at least weekly, up from 10 percent last year, and 6 percent two years ago.

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