Wednesday, March 28, 2007

Average U.S. Home Receives 104.2 TV Channels

YEAR # of Channels # of Channels Viewed % of Available Channels Viewed
2006 104.2 15.7 15.1%
2005 96.4 15.4 16.0%
2004 92.6 15.0 16.2%
2000 61.4 13.6 22.1%
1995 41.1 10.1 24.6%
1990 33.2 n/a n/a
1985 18.8 n/a n/a

In 2006, the average household tuned to 15.7, or 15.1% of the 104.2 channels available for at least 10 minutes per week.

The average U.S. TV home has 2.5 people and 2.8 television sets.
The average number of channels has increased from 41.1 in 1995 to 104.2 in 2006. While I believe there is extra value in having all of these extra channels, I wonder how you would quantify it and how large it is?

This really gets at the heart of what the benefit the long tail is. How much value does extra choice give to consumers? How much better is having access to 40,000 DVDs through Netflix than hundreds at your local video store? How much better is having access to millions of books at Amazon over thousands in your local book store?

I wonder whether the standard economic statistics we look at captures this increase in choice. When you are comparing standard of living in 1995 to 2006, does it take into account the greater selection of content we have available? If you paid $40 a month for 40 channels in '95 and now pay $40 a month for 100 channels in '06, how much has the real value of the cable service increased? I would hope that the cost of living measurements would capture this, but I am not sure they do.

I also find it interesting that if you look at the number of channels viewed, it has slowly increased from 10.1 to 15.7. But, the % of channels viewed has gone down from 24.6% to 15.1%. So while people actually are getting more channels that they value (they are watching an additional 5.6 channels for a 50% increase), they feel like there is less on TV that they like. This leads to the call for ala carte pricing, since the average viewer sees so many channels that they aren't viewing. What most viewers don't understand is that nobody watches most of the channels, and to save money on ala carte pricing, they will have to view less than the 15.7 channels the average viewer watches.

via Nielsen Media

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