More Than One if Five Broadband Households Have No Pay-TV Service, Study Finds

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You don’t have to look far these days for news on cord-cutting. According to a report out this week from Leichtman Research Group the largest U.S. pay-TV providers lost a combined 795,000 subscribers in 2016. According to a report out last week from TiVo the share of cord-cutters who have dropped service within the previous year reached 19.8 percent in the fourth quarter, the highest ever registered, suggesting the phenomenon is accelerating.

In yet another report released this week, The Diffusion Group turned the telescope around and looked not at how many pay-TV households have dropped their service but at the number of U.S. broadband households that are going without pay-TV service. If anything, the view was even worse for the pay-TV industry.

According to TDG’s survey, 22 percent of the 100 million households that subscribe to broadband — some 22 million homes — do not have pay-TV service. That’s up from 9 percent of the 85 million broadband subscribers in 2011, or 8 million households, and up from 18 percent just since the beginning of 2016. Read More »

The Fault In Our Stars: Lessons From The 2015 Box Office

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Economists have long recognized that the sports and entertainment industries exhibit elements of what University of Chicago economics Sherwin Rosen called the economics of superstars in his classic 1981 study, in which small differences in talent or popularity can lead to outsize differences in returns. Anyone who reaches the NBA, for instance, is by definition an elite athlete. But Star-Wars-Force-Awakens1if the superior skills of a LeBron James or Kobe Bryant added a mere 2 points per game on average to his team’s total, in a league where the average point differential per game is 0.06, over the course of a season they could easily add a half a dozen or more wins to the team’s record, making the difference between first place and missing the playoffs. Given the financial payoff for the team’s owners of reaching the playoffs, James and Bryant are worth almost any price, as in fact their salaries reflect.

Similarly, there are many talented performers in the entertainment industries. But people tend to prefer to listen to the same music and see the same movies as their friends. So if their friends start to listen to Adele or Taylor Swift more than other artists, even by a small amount, that difference in popularity is quickly amplified through network effects to where Adele and Swift tower over others in the charts and can command almost any price for their concerts. Read More »

Does (Screen) Size Matter?

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Conventional wisdom in the video industry has long held that programming preferences were closely correlated with screen size. Thus, smartphones, with their small screens, were best suited and most widely used for short-form video “snacking,” apart from the occasional live stream of a sporting event or other time-critical content iphone_TVbeing watched away from home. Long-form programming such as movies and TV shows were preferentially watched on the big-screen TV in the living room. Tablet viewing was somewhere in between.

Data from Ooyala’s Q1 Global Video Index, however, suggests that conventional wisdom needs to be revised. According to the report, the correlation between program length and screen size is rapidly breaking down:

Screen size is being democratized by online video content. Online viewers are spending more time watching long-form content over ten minutes in length than ever before. More than half (59%) of the time people spend watching video on tablets is spent with video 10 minutes long or longer. That’s the most of any device, trailed by connected TVs (43%), mobile phones (37%) and PCs (35%).

For content up to 10 minutes in length, once the domain of mobile phone snackers, PCs surprisingly had the highest percentage of viewing time spent in Q1, 65%, closely followed by mobile phones (63%), connected TVs (57%) and tablets (41%).

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