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U.S. customers drop pay-TV for streamer amid economic woes

06-14-2011 14:30 BJT

LOS ANGELES, June 13 (Xinhua) -- The number of U.S. customers willing to drop pay-TV services and turn to Netflix streamer have doubled since last year as economic situation gets worse, according to a new survey.

Among the 2,000 broadband users who responded to the poll and who also subscribe to cable, satellite or telco TV services, 32 percent said they are likely to at least downgrade their pay TV services -- an 100 percent increase over the 16 percent who were likely to do so when The Diffusion Group conducted the same research last year.

As the survey indicates, the so-called "Netflix Effect", a notion which suggests that growing use of Netflix will lead to PayTV service downgrades and even cancellation, is gaining force, as the two major TV service providers head to a collision course under current economic conditions.

"Despite its rhetorical positioning, both Netflix and PayTV operators have long been aware that there will come a point at which its services are not only dilutive to regular TV viewing, but antithetical to PayTV subscription levels," said Michael Greeson, TDG's founding partner and director of research.

"The question for realistic observers has been not if this will occur but when. According to our latest research, that time is upon us."

The foremost reason behind the switchover is economy, as customers have been forced to tighten their belts to make ends meet, according to the Frisco, Texas-based market strategy company.

Of those Netflix streamers who say that they're likely to downgrade their pay TV services in the next six months, nearly half cited "cost of service" and "need to save money" as a reason for doing so. In comparison, 34 percent who cite their increasing consumption of video via the internet as well as Netflix itself.

Boasting more than 23 million members in the United States and Canada, Netflix is the world's leading Internet subscription service for enjoying movies and TV shows.

Editor:Zheng Limin |Source: Xinhua

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