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TV home penetration down, but is it headed lower?

US TV homes and households 2000-2016

The U.S. Energy Information Administration says that the number of homes without a TV is increasing, and the number of TVs per home is decreasing. Are PCs, tablets, and smartphones beginning to replace the TV in American homes.

EIA penetration of TVs in US homesIn its most recent Residential Energy Consumption Survey, the EIA reports that the number of homes without a TV has increased to 2.6%. As recently as 2009, there were just 1.3% of homes without a TV. As well, the EIA says the number of TVs per household has also decreased. The average in 2015 was 2.6, and fell to 2.3 in 2015.

Television penetration has fallen

Looking at Nielsen data for the number of television homes, you might not think there was any decline at all. The company says that since the turn of the century the number of TV homes has increased 16.2M, to 118.4M. However, the number of US homes has increased a little more, 21.1M, over the same period, to reach 125.8M.

Television penetration hit its peak for the 2010-11 TV season, reaching 98.6%. It has subsequently fallen over 4.5%, to 94.1% for 2016-2017 season. However, most of that fall occurred between 2011 and 2013, when penetration fell over 4.3%. For the last 4 years, penetration has bounced around 94%, with between 7 and 8M homes lacking a TV.

The impact of PCs, Tablets, and Smartphones

2010 marked the beginning of the build-out of high quality video online. That year the iPad was released, and was immediately embraced by consumers and, more importantly, by Hollywood. At the beginning of 2010, Netflix had 12.3M subscribers, and by the end of 2012 it more than doubled that number to 27.2M. In December 2012, YouTube served 182M unique viewers with 40B videos.

Consumers began to watch TV and web originals on PCs, tablets, and smartphones in earnest during this period. It certainly had some effect. Likely, some consumers decided not to replace a bedroom TV, and instead rely on one of the connected devices in their possession. And 4M homes realized they could do without a TV completely in favor of their connected devices.

But why hasn’t TV penetration continued to fall?

Why penetration has stabilized, and will rise again

The rise of the connected television has slowed the decline of the television in the home. In 2013, use of the connected TV by consumers was so small Nielsen didn’t even bother to count it. Now the company reports 43% of the population use smart TVs, streaming media players, and game consoles. They are watching an average 1 hour and 12 minutes of video per day on them.

What changed over the last 4 years? Certainly, connected TV hardware has become far more accessible. There are now many options to connected a TV to Internet at or below $50. However, it is the industry’s attitude to the devices that has shifted the most.

In 2013, Comcast refused to authenticate its customers wanting to use HBO Go on a Roku. Today, the cable behemoth is putting the full Xfinity pay TV service on the device. Comcast also released the Netflix client on the Xfinity X1 set-top box 3 months ago. Now the company reports that nearly a third of X1 customers are using it.

For the future, as consumers move more viewing online, they will continue to prefer to watch longer videos on the television. This will likely keep home penetration at current levels, and may cause it to increase. However, with the increasing size of smartphone displays, consumers may be increasingly comfortable using them in the bedroom and kitchen. This may lead to the number of televisions per home falling further.

Why it matters

The penetration of the television in U.S. homes has fallen significantly over the last 7 years.

As well, the number of TVs per home has also fallen.

Now that connected TVs have been embraced by consumers and the television industry, expect the penetration to stabilize and begin to grow again.

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