Recently, many traditional multichannel TV distributors (cable, DBS, telco-IP) have seen significant numbers of subscribers downgrade to lower service levels, or fully drop their services. Research by Parks Associates suggests that some of the decline is enabled by broadband adoption. Their research suggests that 13% of consumers with broadband have made cutbacks in paid TV services in the last year, and another 9% are likely to do so in the near future.
What's worse for TV services is that these users tend to be heavy TV viewers. The study indicates that nearly a quarter of broadband households use the Netflix Watch Instantly service, leading to their suggestion that pay TV services upgrade their video on demand offerings to better compete with Netflix and other streaming services.
In a related finding, the study concluded that "TV Everywhere" expanded services was unlikely to be significant retention tool, with only 11% of pay TV subscribers willing to pay $15 or more a month for the service. (At this point, most talk of TV everywhere is not as a separately offered service, but as a feature of a service's premium (and higher priced) service bundle.)
With broadband services continuing to expand, and with forecasts that half of all flat-panel TVs sold in the US in 2011 will be Internet-connectable, access to online video looks to continue to expand. If this wasn't bad enough news for pay-TV, the research results suggested that likelihood of downgrading or cutting TV services was linked more to broadband adoption than high levels of watching online video - suggesting that "cord shaving" and cord "cutting" is not driven by demand for online video per se, but the capability to access traditional types of TV programming at similar quality levels as that delivered by pay TV systems. A capability that broadband diffusion provides.
Source - Downgrade: Broadband Adoption Linked To TV Cord-Cutting MediaDailyNews