Report: Zero-TV Homes Jump to 5 Million in Q4 2012

The number of zero-TV homes — essentially, homes that have cut the cord — are up to 5 million, according to a new report from Nielson. This represents a 2 million home jump since 2007, when estimates showed that there were 3 million zero-TV homes in the U.S.

Nielson’s definition of “zero-TV” doesn’t necessarily mean that there are no TVs in the house, but that these TVs are not used traditionally. Instead of watching cable TV shows, for instance, these sets are used for watching DVDs, gaming and streaming online video through services like Netflix, Hulu Plus and Amazon Prime.

It’s estimated that zero-TV homes view 37% of content through computers, 16% over the Internet, 8% through smartphones and 6% through tablets. For the 5 million homes that are considered to be zero-TV, these mediums have taken over as the main content sources, leaving traditional cable TV behind. The number of online streaming video subscribers — Netflix alone has 27.1 million in the U.S. as of January — is much higher than the 5 million homes designated as zero-TV, which means the opportunity is there for non-traditional content providers to keep chipping away.

In essence, these services are fantastic trojan horses.

Think about it. There are 27.1 million streaming subscribers using Netflix. Hulu Plus had over 3 million paying customers at the end of 2012. And Amazon is estimated to have anywhere between 3-5 million Amazon Prime subscribers. The prices on these services are low, which means consumers can pay an extra $7 or $8 per month to enjoy additional on-demand content.

Meanwhile, services like Netflix and Amazon are hard at work developing and producing their own TV shows — efforts believed by many to be the future of television. While completely cutting the cord may not be cost-effective if you like what’s currently on TV, it might be a more appealing option if your favorite shows are released exclusively through  a service like Netflix or Amazon. The only area the Web truly lags behind traditional TV is with live sports — in particular, the NFL.

Are you part of a zero-TV home? If not, do you plan on dropping traditional TV for smartphone/tablet content and Web-based media in the future? Let us know in the comments.