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Cable Technology Feature Article

April 13, 2009

Despite Recession, Most Americans Sticking with Pay TV Service

By Narayan Bhat, TMCnet Contributor

Market research firm Pike & Fischer has dispelled the fear that the current recession may encourage Americans to abandon cable or satellite TV service and switch to free online video services.

Nearly 70 percent of those who responded to the researchers’ survey said they would not drop their cable or satellite TV service at least for one more year. But, 600 other respondents said they plan to drop their multichannel video service to cut down on household expenses.

However, nearly 15 percent of respondents said they intend to downgrade to a lower-priced video subscription this year while 8 percent said they plan to upgrade their service to receive more channels or advanced services such as high-definition TV.

Although there are no signs yet that the Web is on its way to replacing traditional TV, a substantial number of respondents said they are turning to the Web to watch video.

However, another recent survey conducted by market research firm In-Stat, found that 25 percent of respondents were interested in replacing their pay-TV service with Internet-delivered video.

About 32 percent of people polled by the Pike & Fischer (News - Alert) for this survey did say they regularly watch video from Web sites such as Hulu, YouTube and iTunes.

"The results indicate that consumers appear to be willing to continue paying for cable or satellite TV, despite the fact that they can get a vast amount of shows for free or very low cost on services like Hulu and Veoh," said Scott Sleek (News - Alert), director of P&F's Broadband Advisory Services. "But they don't appear to be willing to spend any extra money for premium channels or on-demand movies. And they're increasingly willing to go to the Internet to watch their favorite shows."

Narayan Bhat is a contributing editor for TMCnet. To read more of Narayan’s articles, please visit his columnist page.

Edited by Stefania Viscusi