By the end of this year, there will be more mobile video users in North America than households here that subscribe to digital TV.
That means that more people in North America will be watching online video — think services like YouTube, Netflix, Hulu, and Amazon Prime Instant Video — on their smartphones and tablets connected to a cellular network than there are households that watch traditional cable, satellite, or antenna-delivered TV.
The data, which are part of Cisco’s Visual Networking Index Forecast, the networking equipment provider’s annual look at — and predictions for — global internet use, comes amidst a huge shift in the way people watch TV.
For a growing number of people, streaming services are taking the place of traditional TV.
In the US, subscriptions to pay TV providers — companies like Comcast, Time Warner Cable, and DirecTV — are declining. The pay TV industry in the U.S. lost 31,000 subscribers last quarter, which is usually a strong period for subscriber growth, according to the media research firm MoffettNathanson.
At the same time, streaming video is surging.
According to Cisco, mobile video will grow at a compound annual growth rate of 10.2%, while online video, which the company defines as any video watched on a device connected to a fixed network, like a home or office WiFi connection, will grow at a compound annual growth rate of 7.1%. Subscriptions to digital TV will grow at a compound annual growth rate of only 1.7%.
Cisco incorporates its own analysis as well as data from a number of independent research firms and from governments and international institutions to produce its annual report.
Thomas Barnett, director of thought leadership at Cisco, told Business Insider that even though we’ll be using an increasing amount of data on our smartphones, our bills “won’t necessarily go up,” because many consumers have a choice of different wireless carriers and plans.
“The bottom line here is that mobile users have the flexibility to choose the plan and carrier that best suits their usage patterns and budget,” he said.
Barnett also said that mobile carriers may offload some of the cellular traffic to the growing number of WiFi hotspots available in many areas, which will ease network congestion and help customers avoid overage fees if they’re doing data-intensive things like streaming video or making a video call.
A host of new streaming services have launched or are set to launch in the U.S. this year. HBO, the premium network, unveiled HBO Now, a standalone streaming service. Dish, the satellite provider, launched Sling TV, a slimmed down package of TV channels delivered online. Sony announced its own online TV service. Verizon is set to launch an internet TV service of its own later this year, and Apple is rumoured to launch one this fall.
These new streaming services are not encumbered by the same restrictions as traditional TV, which require expensive cable infrastructure or a satellite dish, and for the most part only allow you to watch in your home.
New streaming services are designed so that people can watch on their smartphones, tablets, and PCs, in addition to their TVs — all it takes is a cellular connection (it will use a lot of data) or a connection to a WiFi network.