Washington, D.C. (March 14, 2013) -
Editor's Note: Phillip Swann, publisher of TVPredictions.com,
today is offering his predictions and perspective on eight
prominent trends in TV technology. On this page, he examines
'Cord Cutting,' the concept that consumers will eliminate their
pay TV service to watch online video.
2. Cord Cutting
Cord-cutting is a myth, largely perpetuated by tech journalists who love to poke
holes in the traditional corporate world. These journalists also have trouble
separating what they and their friends do as individuals in places like Silicon
Valley, New York and Los Angeles and what people do everywhere else.
Also spreading the propaganda are company officials who stand to benefit from
creating a perception that people are dropping their pay TV services. Think
Netflix. Think Apple. Etc. They want consumers to think that millions of
Americans will soon drop their cable and satellite subscriptions to watch video
online for free and/or a reduced price because it might persuade them to
actually do it.
But the numbers – the hard, cold numbers – expose the lie that cord cutting is a
rapidly growing trend that threatens to become a mass phenomenon.
While a relatively small number of subscribers have dropped their cable service
to cut costs, many others have dropped to sign up with another provider. For
instance, both DIRECTV and Dish just reported a combined increase of 117,000
subscribers in the fourth quarter. DIRECTV added 662,00 subscribers in 2011 and
another 199,000 in 2012. Verizon and AT&T have also reported significant gains
in both years.
SNL Kagan said
just this week that pay TV providers added 46,000 subscribers in
2012, which was down from 280,000 in 2011 but still suggests
that only a small number of consumers are cutting the cord.
Even Comcast, which lost 1.6 million video subscribers from 2009 to 2012, just
reported that it lost only 7,000 video subs in the fourth quarter and it would
have actually added subs if it weren’t not for the impact of Hurricane Sandy.
Peter Kafka of AllThingsD, a voice of sanity in the tech journalism world,
estimates that the number of people who actually left any pay TV
service in 2012 may have been less than 500,000. That’s about
0.5 percent of the TV audience. Not exactly a trend when
you consider that people are searching for ways to cut costs in
The overwhelming majority of Americans want to keep their cable and satellite
subscriptions because it's the best and least expensive way to watch live
broadcasts, such as sports and breaking news events. Television is at its most
powerful when it's broadcasting a compelling, live event. But if you cut the
cord, you'll miss it and the consequences could be serious if the news is
There’s no doubt that more people are watching streaming services, such as
Netflix, which now reports having 27 million streaming subscribers in the U.S.
But people are supplementing their pay TV viewing with Netflix and other
streaming services; they are not replacing it.
This is a good time to
move to our #3 trend. Click below to
3. Streaming. Click below to
go to part one of this feature: