TDG: Proclivity to Downgrade PayTV Services Increasing among Netflix Streamers - TDG Press Release #infdist

Frisco, TX (June 13, 2011) – According to The Diffusion Group’s (TDG’s) latest analysis of Netflix Streamers—those that stream Netflix content to their net-connected devices—the inclination to downgrade PayTV services has doubled in just the last 12 months.

In March 2011, TDG queried a random sample of adult broadband users that subscribe to cable, satellite, or telcoTV service as to the likelihood they would downgrade their PayTV service in the next six months—that is, “…move from a higher service tier to a lower one, or cancel a premium service of some kind.” In general, the percentage of Netflix Streamers to varying degrees likely to downgrade their PayTV service increased from 16% in 2010 to 32% in 2011.

Though Netflix has gone to great lengths to reassure PayTV operators that its offerings are additive to regular TV viewing and thus not a competitive threat, research now suggests that the ‘Netflix Effect’—that is, growing use of Netflix will lead to PayTV service downgrades and even cancellation—is gaining momentum.