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News Feature
Cord Cutting: Will It Stay Or Go?
By Swanni

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 this economy.

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 particularly bad.

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 read:
3. Streaming.

Click below to go to part one of this feature:
Swanni

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