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Cord-Cutting Rises as Consumers Shift to Streaming Over-the-Top Video, According to NTIA Survey

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BROADBAND BREAKFAST INSIGHT: That latest internet use survey from the Commerce Department’s National Telecommunications and Information Administration shows that the proportion of internet users watching videos online has grown from 45 percent in 2013 to 70 percent in 2017. The organization added a question about over-the-top vide viewing to its survey in order to track trends and demographic differences in internet use. Overall, 73 percent of U.S. households had a cable or satellite television subscription in 2017, which is down from a high about a decade earlier.

Cutting the Cord: NTIA Data Show Shift to Streaming Video as Consumers Drop Pay-TV, from NTIA:

Americans increasingly are moving away from cable and satellite pay-TV services and opting to stream online video offerings, data from NTIA’s latest Internet Use Survey show. While most households still subscribe to cable or satellite television services, the survey shows the proportion of Internet users watching videos online has grown from 45 percent in 2013 to 70 percent in 2017.

Internet-based video services typically provide on-demand streaming from a large content library, and are not dependent on the offerings made available by any particular cable or satellite provider. The shift away from pay-TV services crosses all age groups, but younger Internet users have consistently been much more likely to watch video online than their older counterparts. For example, 86 percent of Internet users between the ages of 15 and 24 watched video online in 2017, compared with just 40 percent of users ages 65 and older (see Figure 1).

Graph showing percentages of Internet users watching videos online

Given this rapid change in just a few years, as well as the significant demographic differences, NTIA in 2017 added survey questions that specifically asked about subscriptions to traditional cable and satellite programming. Overall, 73 percent of U.S. households had a cable or satellite television subscription in 2017. Of the 27 percent that did not, two-fifths (40 percent) were “cord cutters,” or households that reported previously having a subscription, while the other 60 percent said they never signed up.

Internet users in cord-cutting households were more likely than their peers to watch video online; 82 percent of cord-cutting Internet users watched video online in 2017, compared with 67 percent of those in households with a cable or satellite television subscription, and 71 percent of those in households that never had such a subscription. This is an indicator of how the traditional television subscription is faring in the era of pervasive streaming, and we will continue to track this trend in future studies.

Why are Americans dropping subscription services? For some, particularly younger viewers, it’s a matter of preferring online video to subscription services. While 26 percent of non-subscribing households between the ages of 15 and 44 cited the use of Internet-based video services as a reason, only 15 percent of their counterparts between 45 and 64 and 8 percent of those ages 65 or older cited this reason.

Concerns over cost and relevance were common to all age groups, with 46 percent of non-subscribers citing cost and 38 percent saying they had no interest. These results suggest that while cost and personal preferences dominate decisions about purchasing cable or satellite television services, the availability of Internet-based video services is also influential.

Nineteen percent of households lacking cable or satellite TV service cited using Internet-based video services instead of traditional television service. This includes 24 percent of cord cutters and 16 percent of households that had not previously subscribed.

About three-fifths of non-subscribing households were “cord nevers” that never bought a pay-TV subscription. The cord-never households tend to be younger, lower-income and less likely to be non-Hispanic white than those with cable. In contrast, cable subscribing households are on average over 50, and less likely to have children in the house than cord-cutters. Consider that there is nearly a 20 percentage point difference in terms of mean age between cable and non-cable households.

 

Figure 2: Selected Characteristics by Current or Previous Cable Subscribership
Percent of Households, 2017

Has Cable Previous Cable Use Never Had Cable
Total Households 92.7 Million 13.8 Million 20.8 Million
Family Income < $25K/Year 19% 25% 38%
School-Age Child Present 23% 27% 22%
Located in Rural Area 14% 13% 14%
Household Reference Person* Characteristics
Mean Age 53.0 45.8 47.6
No Post-Secondary Education 35% 32% 45%
White, non-Hispanic 69% 67% 57%
Internet Usage Details
Internet Use at Home 81% 81% 62%
* The reference person is the first individual in each household who is identified as owning or renting the housing unit.

 

This is the first time NTIA has asked questions about cable and satellite television subscriptions. Data gathered in the next Internet Use Survey will build upon the research generally in how Americans are using the Internet, and more specifically should shed more light on trends in subscribership.

NTIA intern Kevin Mersol-Berg contributed to this report. Want to read more of NTIA’s research? Sign up for the Data Central mailing list to be among the first to hear about future publications.

Source: Cutting the Cord: NTIA Data Show Shift to Streaming Video as Consumers Drop Pay-TV | National Telecommunications and Information Administration

Free Speech

Panel Hears Opposing Views on Content Moderation Debate

Some agreed there is egregious information that should be downranked on search platforms.

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Screenshot of Renee DiResta, research manager at Stanford Internet Observatory.

WASHINGTON, September 14, 2022 – Panelists wrangled over how technology platforms should handle content moderation at an event hosted by the Lincoln Network Friday, with one arguing that search engines should neutralize misinformation that cause direct, “tangible” harms and another advocating an online content moderation standard that doesn’t discriminate on viewpoints.

Debate about what to do with certain content on technology platforms has picked up steam since former President Donald Trump was removed last year from platforms including Facebook and Twitter for allegedly inciting the January 6, 2021, storming of the Capitol.

Search engines generally moderate content algorithmically, prioritizing certain results over others. Most engines, like Google, prioritize results from institutions generally considered to be credible, such as universities and government agencies.

That can be a good thing, said Renee DiResta, research manager at Stanford Internet Observatory. If search engines allow scams or medical misinformation to headline search results, she argued, “tangible” material or physical harms will result.

The internet pioneered communications from “one-to-many” broadcast media – e.g., television and radio – to a “many-to-many” model, said DiResta. She argued that “many-to-many” interactions create social frictions and make possible the formation of social media mobs.

At the beginning of the year, Georgia Republic representative Marjorie Taylor Greene was permanently removed from Twitter for allegedly spreading Covid-19 misinformation, the same reason Kentucky Senator Rand Paul was removed from Alphabet Inc.’s YouTube.

Lincoln Network senior fellow Antonio Martinez endorsed a more permissive content moderation strategy that – excluding content that incites imminent, lawless action – is tolerant of heterodox speech. “To think that we can epistemologically or even technically go in and establish capital-T Truth at scale is impossible,” he said.

Trump has said to be committed to a platform of open speech with the creation of his social media website Truth Social. Other platforms, such as social media site Parler and video-sharing website Rumble, have purported to allow more speech than the incumbents. SpaceX CEO Elon Musk previously committed to buying Twitter because of its policies prohibiting certain speech, though he now wants out of that commitment.

Alex Feerst, CEO of digital content curator Murmuration Labs, said that free-speech aphorisms – such as, “The cure for bad speech is more speech” – may no longer hold true given the volume of speech enabled by the internet.

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Big Tech

Twitter Whistleblower Says Company Needs to Work to Permanently Delete User Data

Meanwhile, Twitter shareholders approved a deal to sell the company to Elon Musk, who wants out.

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Photo of Peiter Zatko at Tuesday's Senate Judiciary hearing

WASHINGTON, September 14, 2022 – Twitter’s former head of security and now company whistleblower told a Senate Judiciary committee Tuesday that Twitter must put more resources into trying to permanently delete user data upon the elimination of accounts to preserve the security and privacy of users.

Peiter Zatko, who was fired from Twitter in January due to performance issues, blew the whistle on the company last month by alleging Twitter’s lack of sufficient security and privacy safeguards poses a national security risk. He alleged that the company does not delete user data when accounts are deleted.

On Tuesday, Zatko told the Senate Judiciary committee that the company needs to take the step of ensuring that the personal information of users are deleted when they destroy their accounts.

He alleged company engineers can access any user data on Twitter, including home addresses, phone numbers and contact lists, and sell the data without company executives knowing.

“I continued to believe in the mission of the company and root for its success, but that success can only happen if the privacy and security of Twitter users and the public are protected,” Zatko said.

The Wall Street Journal reported Tuesday that Twitter investors approved SpaceX CEO Elon Musk’s takeover of the company, despite the billionaire trying to back out of the deal allegedly over a lack of information about the number of fake accounts on the platform. The company and Musk are currently in court battling over whether he must follow through on the deal.

Musk’s lawyer has asked the court to delay the trial — scheduled for mid-October — to allow his client to investigate the whistleblower’s claims, according to reporting from Reuters.

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Big Tech

A White House Event, Biden Administration Seeks Regulation of Big Tech

Participants voiced concerns over alleged abuses by big tech companies.

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Photo of President Joe Biden

WASHINGTON, September 9, 2022 – President Joe Biden on Thursday called for a federal privacy standard, Section 230 reform, and increased antitrust scrutiny against big tech.

“Although tech platforms can help keep us connected, create a vibrant marketplace of ideas, and open up new opportunities for bringing products and services to market, they can also divide us and wreak serious real-world harms,” according to a White House readout from the administration’s listening session on Thursday.

Participants at the White House event voiced concerns over alleged abuses by big tech companies.

A new data privacy regime?

The Biden administration called for “clear limits on the ability to collect, use, transfer, and maintain our personal data.” It also endorsed bipartisan congressional efforts to establish a national privacy standard.

Last June, Rep. Frank Pallone Jr., D-N.J., introduced the American Data Privacy and Protection Act. The bill gained substantial bipartisan support and was advanced by the House Energy and Commerce Committee in July.

In the absence of federal privacy laws, several states drafted privacy laws of their own. The Golden State, for instance, implemented the California Consumer Privacy Act in 2018. The CCPA’s protections were extended by the California Privacy Rights Act of 2020, which goes into effect in January 2023.

Biden maintains his position seeking changes to Section 23o

“Tech platforms currently have special legal protections under Section 230 of the Communications Decency Act that broadly shield them from liability even when they host or disseminate illegal, violent conduct or materials,” argued the White House document.

Biden’s hostility towards Section 230 is not new. Section 230 protects internet platforms from most legal liability that might otherwise result from third party–generated content. For example, although an online publication may be guilty of libel for a news story it publishes, it cannot be held liable for slanderous reader posts in its comments section.

Critics of Section 230 say that it unfairly shields rogue social media companies from accountability for their misdeeds. And in addition to Biden and other Democrats, many Republicans are dislike the provision. Sens. Ted Cruz, R-Texas, and Josh Hawley, R-Missouri, argue that platforms such as Twitter, Facebook, and YouTube discriminate against conservative speech and therefore should not benefit from such federal legal protections.

Section 230’s proponents say that it is the foundation of online free speech.

Ramping up antitrust

“Today…a small number of dominant Internet platforms use their power to exclude market entrants,” Thursday’s press release said. This sentiment is consonant with the administration’s antitrust policies to date. Indeed, Lina Khan, chair of the Federal Trade Commission, was a vocal antitruster in the academy and has greatly expanded the scope of the agency’s antitrust efforts since her appointment in 2021.

In the Senate, Sen. Amy Klobuchar, D-Minnesota, is sponsoring the American Innovation and Choice Online Act, a bill that bans large online platforms from engaging in putatively “anticompetitive” business practices. The measure was approved by the Judiciary Committee earlier this year, and, though it was stalled over the summer to make way for other Democratic legislative priorities, it may come for a vote this fall.

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