America is watching more TV than ever before—just not on TV

April 2, 2013
April 2, 2013

It seems like only December 2010 that Americans admitted to spending as much time on the internet as they did in front of their televisions. Less than three years later, one-third of America’s internet users—and more than 80% of the population is an internet user—say they would consider ditching TVs altogether, according to a new report by market research firm eMarketer.

153491That may not sound like a huge proportion but by next year, more than half of American internet users will be watching movies and television shows over the internet. In 2012, 106 million Americans watched TV online. By 2017, that number will 145 million, an annualized growth rate of nearly 7% year-on-year. The industry likes to refer to it as “cutting the cord.” It is an apt metaphor.

A big reason for the shift is the wealth of options for viewers. They can watch what they want to—the amount of content grows daily—and when they want it. They can watch it on their computers, tablets, phones or smart TVs. And they can pay for it in the manner that they prefer.

The business models are plentiful: some broadcasters such as HBO and Showtime are actively cannibalizing their own audiences by offering access to their content online. That makes sense; better they do it themselves than lose their viewers to other streaming services. Others offer unbundled offerings, ad-supported services or, like Netflix, monthly subscriptions.

150535That Netflix sees itself as competing with traditional broadcasters is no secret. In February, it released 13 episodes of “House of Cards,” which it bought for $100 million for two seasons. The show has been the streaming service’s biggest hit. Even before “House of Cards,” Netflix’s revenues for streaming, both in the US and abroad, rose steadily. Its DVD rental business shrunk every quarter in 2012.

The latest figures do not imply the death of television. When you count TV audiences on all devices, American TV viewing is at an all-time high. But Americans are watching it via the internet more than ever.

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