Entertainment & Arts

Netflix grows subscriptions in US as pay-TV declines

Kevin Spacey in House of Cards Image copyright AP
Image caption Political drama House of Cards is a Netflix original series

The number of US households signing up to online video subscription services such as Netflix has grown by 4%, at the expense of premium pay-TV channels like HBO and Showtime.

Subscriptions to pay-TV channels fell by 6%, according to an NPD Group report on viewing behaviour between March 2012 and August 2013.

A third of American homes paid to watch premium TV channels in August 2013.

The number of homes signed up to streaming services had risen to 27%.

The study also found that seven out of 10 films and TV shows were watched through on-demand services - including subscription firms like Netflix and Amazon Prime, or as a feature from a cable provider like HBO Go - instead of being rented or bought from Apple's iTunes or Walmart's Vudu.

"It's fair to say that some of the shift that you're seeing is probably caused by Netflix," Russ Crupnick, a senior vice president of the NPD Group told the LA Times.

He added: "Some of this could be caused by the economy. It could be people looking at their cable bills and saying, 'I can't afford this.'"

However, while the figures show people have gravitated towards on-demand services to watch films and TV shows, the viewers questioned were not asked if they had dropped premium cable services as a result.

Other studies have found that Netflix is generally an addition to TV services and not a replacement.

Pay TV service Showtime said it added one million subscribers in the past year, reaching 23 million. HBO's figures remained flat at around 28 million, according to Variety.

However, the rising number of US homes means the services are effectively losing ground - because, as a percentage of total households, their subscriber base is narrowing.

The number of US Netflix subscribers reached 31.1 million at the end of the third quarter of 2013, which was up 24% from the year before, and the company is due to report its next set of figures on Wednesday.

NPD's State of SVOD (subscription video-on-demand) findings are based on analysis of 450,000 consumer transactions, and surveys of 7,500 people.

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