Over one million US pay TV subs cut the cord in 2012

Just over one million US pay TV customers cut the cord in favour of online video last year, according to a report by Convergence Consulting.

About 1.08 million US customers cancelled their pay TV services in favour of online video options and free-to-air TV last year, according to the Toronto-based group. Convergence Consulting said that about 3.74 million pay TV subscribers had cut the cord over the last four years and that the total would reach 4.7 million this year.

The group estimated that 31,000 pay TV subscribers were added last year, down from 112,000 in 2011. However, 98,000 new subscribers are expected to sign up this year – a figure that is still considerably lower than the average 1.86 million that signed up for pay TV between 2004-09.

Online subscriptions to Netflix and like services represented 28% of US movie/TV rental market revenue in 2012 and is expected to rise to 34% this year, with the share attributed to video-on-demand services from traditional pay TV operators forecast to fall from 20% to 19%. Video store revenue is expected to fall from 13% to 9%, with DVD mail services likely to fall from 15% to 12%.