Numbers Are In: Survey Says Netflix Leads to Cord-Cutting

According to a survey conducted by financial services firm Cowen & Co., about 23 percent of Netflix subscribers say they have canceled their premium TV service after opting to pay for broadband access to stream TV over the Internet — signifying a direct tie to cord-cutting. Among the 1,200 respondents, 46 percent said they have access to Netflix, while 28 percent are paying for the SVOD service.

“[Netflix CEO Reed] Hastings and multichannel video program distributors have steadfastly denied any correlation between SVOD and slumping cable video subs. The number of U.S. households subscribing to pay TV services dropped by 1.5 million in 2011, according to Nielsen,” writes Home Media Magazine. Even so, Hastings calls Netflix complementary to cable TV, not a substitution.

Last year, Hastings told AllThingsD: “We compete with HBO like baseball and football compete. We sell to the same person, we deliver some of the same emotion, but it’s not direct competition. People subscribe to both. And the people who love us often subscribe to HBO. They don’t have any of the same content we have, and we don’t have any of the content they have. So it’s a pretty indirect competition for time and money.”

But that indirectness seems less accurate now, especially in the wake of Netflix outbidding HBO and other cable networks for the new drama “House of Cards.” And later this year, Netflix will premiere other original programs and films, like “Hemlock Grove,” “Arrested Development” and others.

“If future original programs are as successful as ‘House Of Cards,’ it likely leads to a stickier subscriber base over time,” writes Cowen analyst John Blackledge. “And that could lead to more households downsizing their cable bill,” adds Home Media.