Online subscription video services like Netflix make gains as HBO, other premium pay TV channels decline

Netflix and other subscription on-demand services are making gains, even as HBO, Showtime and other premium pay-TV channels are losing subscribers, according to a new report from the NPD Group. (The NPD Group / January 20, 2014)

Netflix and other online subscription services have been logging gains even as people are canceling HBO, Showtime and other premium TV channels, according to a new report from researcher the NPD Group.

The number of U.S. households subscribing to a premium pay-TV channel such as HBO has fallen 6% in the last two years, while Netflix and other digital subscription services grew by 4%, NPD found.

NPD's "State of SVOD" report is another sign of changing viewer behavior in the digital age. It comes at a time when cable, satellite and phone companies offering video have been losing subscribers.

FACES TO WATCH 2014: Digital media

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

About one-third of American homes paid to watch HBO, Showtime or other premium TV channels in August 2013; while 27% now subscribe to digital on-demand video services such as Netflix, Hulu Plus or Amazon Prime. 

Viewers increasingly are gravitating to on-demand offerings when it comes time to watch movies or TV shows.

Seven out of 10 times, they're using Netflix, HBO Go or a similar on-demand feature from their cable or satellite providers instead of buying or renting a movie or TV show from retailers such as Apple's iTunes, Walmart's Vudu or Redbox, NPD found.

NPD's findings are based on its analysis of 450,000 consumer transactions, and its surveys of 7,500 people.

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