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Netflix Streaming Customers Dropping Pay-TV at Double Last Year’s Rate

The still-grim economy is also nudging consumers away from premium services

Netflix streaming subscribers are cutting the cord at an accelerating rate, a recent poll found.

According to The Diffusion Group, Netflix customers who stream their content through their Web devices are more than twice as likely to drop at least some of their pay TV services.

The market strategy firm polled a random sample of adult broadband customers who also subscribe to cable, satellite or telco TV services in March and found that, of the respondents who watch Netflix streaming content, 32 percent are likely to at least downgrade their pay TV services — an 100 percent increase over the 16 percent who were likely to do when the same survey was conducted last year.

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According to TDG director of research Michael Greeson, the trend indicates that, sooner rather than later, pay TV services and Netflix will have to acknowledge their adversarial relationship.

"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," Greeson said. "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 continuing bleak economy is also contributing to viewers' tendency to abandon pay TV. 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, compared to 34 percent who cite their increasing consumption of video via the web.