Going without cable or satellite is unthinkable to many Americans -- just over 90% of U.S. households subscribe to some form of pay TV. But just as mobile phones have replaced many customers' land-line service, analyst at Yankee Group said on-demand Internet video will soon whittle that 90% figure down.

One in eight consumers will eliminate or scale back their cable, satellite or other pay-TV service this year, according to a new study released this week by Yankee Group.

The study, which was the result of a survey of pay-TV operators and more than 6,000 U.S. consumers, found that many will choose to drop premium channels or cut their service down to a basic package, while others will choose to cut off their service completely.

The biggest reason why customers will cut the cord, according to the study, is the growing cost of pay-TV service. Cable and satellite viewers pay an average of $71 per month, and they receive an average annual price hike of 5%, according to research firm Centris.

Broadcasters like ABC, CBS, Fox and NBC have traditionally cost cable and satellite providers nothing to retransmit, since they are offered for free over the air anyway. But lately, broadcast television networks have demanded -- and have received -- fees for their programming comparable to other cable networks. These higher costs will ultimately drive more consumers to cut their pay-TV service -- especially for non-sports fans.

As most sports are still watched on television, and since sports programming makes up as much as 50% of a pay-TV provider's costs, customers who are not sports fans are essentially paying half of their cable or satellite bill on channels in which they have no interest.

http://money.cnn.com/2010/04/30/tech...ping_cable_tv/