Toronto, Canada – A projected two million U.S. households
will have "cut the cord" and abandoned cable or another pay-TV
service in favor of programming available online by the end of this year,
according to a report from market research firm Convergence Consulting Group.
The total U.S. pay-TV audience is expected to reach 101 million by the end of
An estimated 18% of the weekly TV content viewing audience watched one or
two online TV episodes in 2010, a number expected to rise modestly to 19% by
The firm predicts that the growth rate of free online full-episode
viewing will slow, affected by rising DVR penetration, and video-on-demand
services from providers.
Paid online video services are expected to
benefit from consumers’ cord-cutting, with Convergence projecting Netflix (NASD: NFLX) revenues from
online-only subscribers will grow from $172 million in 2011 to $578 million in
2013, while Hulu revenues will grow from $54 million this year to $225 million
(PDF: Covergence report)