Nielsen: Fewer Watch Traditional Cable, But They Still Own TVs

While more U.S. homes are opting out of traditional cable packages, people continue to use their televisions, according to a report released Tuesday by Nielsen.

About 75% of the estimated five million homes that don’t get TV signals through cable, satellite or telecommunications companies have televisions and are using them to play games, watch DVDs or stream content through streaming services like Netflix (NASDAQ:NFLX).

Traditional TV household penetration at 95.8% slowly continues to decline, Nielsen said, but still dominates the market across all demographics and age groups.

Nevertheless, it highlights a fundamental shift in the way people have watched television over the last six decades, with technology allowing customers to watch what they want, when they want without having to succumb to commercials.

In the first quarter of 2012, Americans spent nearly 35 hours a week watching video across screens and close to another five hours using the Internet on a computer. On the other end, the average TV viewer is watching six fewer minutes a day of traditional television.

Companies such as Cablevision (NYSE:CVC), Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC) that provide access to content through traditional media streams still dominate the market but are facing increasing competition from rising tech giants like Netflix, Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL).

It’s an obvious positive for the world's tablet and smartphone makers but perhaps less noticeably benefits television manufacturers as well, as the newest TVs have adapted with evolving consumer preferences and most now are built to support streaming.

Thus, viewership is growing, just shifting to other devices, including tablets and game consoles. At the same time, more options are flooding the market everyday, allowing consumers to further diversify away from traditional TV.

Video game consoles that have the ability to stream video content such as PS3, Xbox260 and Wii, for example, are nabbing more usage per day. And Nielsen’s cross-platform practice lead, Dounia Turrill, said they will continue to provide an increased number of video options.

They “have established themselves as legitimate players in the space of content delivery directly to the consumer,” Turrill said.