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Study: More Americans ditching cable for Netflix, Hulu

A Netflix envelope containing a DVD movie. [Photo: Marit @ Toomas Hinnosaar]
A Netflix envelope containing a DVD movie. [Photo: Marit @ Toomas Hinnosaar]
More than six million Americans are expected to ditch cable and satellite television in favor of streaming solutions, according to a new study released earlier this month.

The study, commissioned by the Toronto-based Convergence Consulting Group, says it estimates around 6 percent U.S. television households will watch television content exclusively through Internet platforms such as Netflix, Hulu Plus and Amazon Instant Video by the end of the year. That number averages out to about six million U.S. households that will “cut the cord” by the year’s end, according to the study.

Several years ago, many television networks began offering full episodes of their programming online the day after it aired, in most cases for free. But the study found less than one in five American TV viewers watch two to three television episodes directly on a broadcaster’s website, and that number isn’t growing.

“We attribute the leveling off to the growth of Netflix [and others], increasing DVR penetration, advertising loads, less free and more authenticated online full episodes,” the study says.

Subscription internet services — chiefly, Netflix — are having an effect on the blockbuster movie industry as well. The study estimates just 11 percent of new movies were purchased or rented in brick-and-mortar stores last year, while online subscriptions accounted for the largest number — 35 percent — of movie and TV purchases and rentals.

The study estimates that the number of people using online subscriptions to rent and purchase movies and TV shows will rise to 41 percent by the end of they ear, with brick-and-mortar purchases falling to 8 percent.

CCG Report: “Battle for North American Couch Potato,” released April 2014