Report: 1 in 8 are prepared to cancel cable TV

A new report released by the Yankee Group indicates one in eight Americans will drop their cable TV subscription before the end of 2010, with varying reasons cited.

“At the most basic level, the decision to cut off pay TV services is an economic one,” said Vince Vittore, Yankee Group analyst and report co-author.  “As programmers continue to demand ever higher fees, which inevitably get passed on to consumers, we believe more consumers will be forced to consider coax-cutting.”

There are numerous catalysts behind subscription cancelation, including a combination of the following reasons listed by the Yankee Group:  TV subscriptions go up in price as additional channels are included; an even higher number of connected TVs and streaming-ready set-top boxes are released to the consumer market; and the Microsoft Xbox 360, Sony PlayStation 3, and Nintendo Wii all support streaming content (all providing an alternative to cable TV).

Over the next three years, growth in the U.S. TV subscription market is expected to grow just 6.9%, with the number even lower at 3.9% in Europe.  Furthermore, prospective customers between the ages of 18 and 34 are least likely to sign up for a new TV subscription service.  As we noted earlier in the month, 800,000 subscribers left behind their cable TV subscriptions in 2009. Convergence Consulting Group believes that will double to 1.6 million cable cancelers in 2010.

I’m not surprised that the number of people canceling TV service is this high, especially as many cable customers ponder whether it’s worth the cost of paying a monthly TV bill during these harsh economic times.

Streaming services in the living room, including Netflix, Hulu, Blockbuster, and other popular services that are gaining attention are growing, but still tend to be seen as a complement to cable TV rather than a replacement.

Game consoles and Blu-ray players are no longer devices with one unique function – they continue to receive new features and access to new online content.

The PS3 will now stream Major League Baseball through its MLB.TV service, while the Xbox 360 will show soccer in Europe.  Netflix’s streaming capabilities has led to a higher number of first-time subscribers who are streaming services directly into the living room.  Sony also announced its PlayStation Network will sell and rent HD movies to PS3 owners.

Have you considered ditching cable TV?