Subscriber Growth Seen Slowing for Netflix, Hulu Plus

Apr 08 2012

Netflix and Hulu Falling

Most conversations regarding cord cutters tend to focus on the impact of cable company revenues as subscribers jump ship for the considerably less expensive option of streaming media services such as Netflix and Hulu Plus. Not everyone sees this trend continuing, in large part because of rises in streaming media subscription rates. The Convergence Consulting Group has issued a report suggesting that rising licensing costs will force companies like Netflix and Hulu to raise their rates, negatively impacting subscriber growth. The research firm points to turmoil that Netflix experienced last year as evidence of the kind of backlash that streaming media services will face in the future. Of course, one point that Convergence Consulting Group may not be taking into consideration is that cable television package rates have not held steady in recent years and are not likely to in the future either. Will the cost of Netflix and Hulu Plus go up faster than the cost of cable television?

In 2011, only 112,000 U.S. citizens signed up for cable TV packages. This is a significant drop from 272,000 who signed up in 2010.
However, Convergence Consulting Group doesn't see this trend lasting. In fact, it expects a decrease in the number of customers signing up for internet streaming services throughout 2012 and 2013 because of rising licensing costs.

DailyTech

Comments

From CCG's report:

"We estimate 112,000 TV subscribers were added in 2011, down from 272,000 in 2010, and forecast 185,000 TV sub additions for 2012. 2000-2009 annual TV sub additions averaged 2 million. Based on our TV Cord Cutting Model (takes into account economic conditions, annual subscriber additions, digital transition), we estimate 2.65 million (2.6%) US TV subscribers cut their TV subscriptions 2008-11 to rely solely on Online, Netflix, OTA, etc, 1.05 million (1%) in 2011 alone. We forecast cord cutters will reach 3.58 million year end (3.6%) 2012."

Amusing, to say the least.

I'll take Mark Twain for the win, Alex:

There are three kinds of lies: lies, damned lies, and statistics.

Smile

Or, in the words of the inestimable Homer Simpson:

Oh, people can come up with statistics to prove anything, Kent. 14% of people know that.

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