×
You will be redirected back to your article in seconds

As Netflix Rises, Subscriptions to HBO, Showtime and Other Premium Nets Shrink as Percentage of U.S. Households: Report

NPD finds that U.S. households subscribing to premium cable channels dropped 6 percentage points over 18-month period, while Netflix and other SVOD services grew 4 points

Is Netflix putting a dent in premium cable subscriptions? A new study suggests that a growing number of consumers are opting to pay for standalone Internet video services instead of subscribing to channels like HBO or Showtime — although the data does not prove there’s a trend.

Total U.S. households that subscribe to HBO, Showtime, Starz and other premium TV channels declined by 6 percentage points over an 18-month span, from 38% in March 2012 to 32% in August 2013, according to a report from research firm NPD Group. Over the same period, households subscribing to Netflix and other subscription video-on-demand services including Hulu Plus and Amazon Prime Instant Video rose 4 percentage points, from 23% to 27%.

[UPDATE: HBO, Showtime and Starz have disputed the NPD figures, calling them inaccurate. See the story here: Premium TV Networks Say NPD Study Purporting to Show Their Decline Is Hogwash.]

One big caveat to this report: The data does not demonstrate cause and effect. NPD did not ask consumers if they dropped premium cable TV services because they were switching to Netflix or other SVOD options. Meanwhile, other studies have found that Netflix is additive to the pay-TV bundle in general, and not a replacement. For example, a TiVo Research and Analytics study released in July 2013 found there was no significant difference in the amount of traditional TV viewing between Netflix and non-Netflix households (at least among TiVo DVR owners).

SEE ALSO: Netflix Stock Drops on Fears of Higher Costs After Ruling Strikes Down Net Neutrality

Furthermore, Showtime says it actually grew subscribers in the past year — to hit 23 million at the start of 2014, up from 22 million a year ago. HBO’s subscriber count in the U.S. has been flat at around 28 million, but the Time Warner-owned cabler says it, too, boosted sub numbers last year (though a rep declined to release specifics). Starz, for its part, said it added a net 1.2 million subs for the 12 months ended September 2013, to hit 22 million.

Even so, it’s worth noting that overall pay-TV distribution as a percentage of U.S. households is dropping. In August 2013, 86% of U.S. households subscribed to cable, satellite or telco TV service, down from 88% in 2010, according to Leichtman Research Group.

NPD analyst Russ Crupnick, however, was comfortable speculating that some consumers obviously are eliminating their premium-TV subscriptions in favor of broadband-delivered video services. “As SVOD increasingly strives to become a channel itself, viewers might consider it to be an adequate substitution for other premium channels, or perhaps they are switching to economize on their time and money spent,” he said.

Netflix had 31.1 million U.S. streaming subscribers as of the end of the third quarter of 2013, up 24% from a year earlier. Netflix is set to report Q4 2013 results on Wednesday.

NPD’s report was based on a survey group with 7,500 respondents in households with Internet access. The company said data is weighted to reflect the U.S. population aged 13 and older.

Popular on Variety

More TV

  • Norman LearVariety Showrunners Dinner, Inside, Los

    Norman Lear Accepts Creative Conscience Award at Variety Showrunners Dinner

    Norman Lear accepted Variety’s Creative Conscience Award Tuesday night at the publication’s annual Showrunners Dinner. The award honors Lear for his work promoting important causes both inside and outside the entertainment industry. Lear, who appears on the current cover of Variety, recently renewed his overall deal at Sony Pictures Television. Speaking at the Showrunners Dinner [...]

  • Maria Bartiromo

    Maria Bartiromo Renews Pact With Fox News Media

    Maria Bartiromo will be on Fox Business Network and Fox News Channel for a while longer, after striking a new multi-year deal with Fox News Media. “Her exceptional insights and incredible work ethic have been of tremendous value to Fox Business and Fox News and we’re thrilled to have her continue anchoring each of her [...]

  • Lisa Simpson Tapped as Head of

    Lisa Simpson Tapped as New Head of Talent Relations at Fox Entertainment

    Fox Entertainment has appointed Lisa Simpson as its new head of talent relations. In her senior vice president role, Simpson will oversee the talent relations team, providing strategic support to all of the company’s talent and their representatives. She will report directly to Jean Guerin, executive vice president of publicity and corporate communications at the [...]

  • Mark-Paul Gosselaar 'Was Never Approached' for

    Mark-Paul Gosselaar Says He 'Was Never Approached' for 'Saved by the Bell' Revival

    The Bayside gang is reuniting, but Zack Morris isn’t invited — for the time being, at least. Mark-Paul Gosselaar, who played the good-looking yet incorrigible Zack in NBC’s beloved “Saved by the Bell” series, said he was never approached to take part in the show’s forthcoming TV sequel, which will reprise roles from Mario Lopez [...]

  • Contract Placeholder Business WGA ATA Agent

    How Showrunners Handled Staffing Season Amid WGA-ATA Feud

    This year’s TV staffing season wasn’t quite like any before. Described as a “free for all” by “Batwoman” creator and showrunner Caroline Dries and “like the Wild Wild West” by “Legacies” creator and showrunner Julie Plec, the WGA-ATA debacle has had deep-seated effects on the way showrunners staff their writers’ rooms and search for fresh [...]

  • 2020 TV Season Preview

    How 2020's Fall TV Season Is Already Shaping Up

    Aiming to stand out in a crowded field, broadcasters this season have leaned on the stability of their schedules and the return of established hits. But for many of the same reasons, they’ve also begun to seed the ground for next year’s crop of shows, considering that top performers like “How to Get Away With [...]

  • David E Kelley

    Looking Back on David E. Kelley's History-Making Double Emmy Wins 20 Years Later

    David E. Kelley thought there’d been a mistake. On Sept. 12, 1999, the prolific showrunner was backstage at the Shrine Auditorium, having just accepted the best drama series Emmy for “The Practice,” when he heard his name called again. Kelley immediately figured that the producers were summoning him out again to take the award away [...]

More From Our Brands

Access exclusive content