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Cable Technology Feature Article

July 06, 2011

Still Little Sign of Video Cord Cutting

By Gary Kim, Contributing Editor

Market watchers still are waiting for tangible signs that the video cord cutting trend is building. So far, all studies show minimal amounts of abandonment of subscription TV services. 

But online video usage continues to climb. Research firm eMarketer (News - Alert) estimates that 158 million US internet users will download or stream video at least monthly in 2011, representing 68 percent of web users. By 2015, 76 percent of internet users will be participating in this trend. But this doesn’t mean they will be cutting the cord on their pay-TV service, eMarketer still maintains. 

“Despite surveys showing consumers’ expressed interest in cutting all pay-TV services, few households actually have done so,” said Lisa E. Phillips, eMarketer senior analyst. As many have noted, up to this point, it is  “cord shaving,” the downgrading of existing levels of service that actually has been occurring. Perhaps the best example of this is the substitution of Netflix for premium cable channels. 

But there is a disturbing trend for subscription TV providers: some young adults may never sign up for cable or satellite service when they leave their parents’ household, and simply do not buy the service. 

The data is complicated to some extent by perhaps short-term economically-induced behavior, though. Recent surveys, including a November 2010 Harris Poll survey of actions Americans have taken to save money, shows consumers still are cutting back on spending on cable TV service, wireless or fixed-line voice over 2009 levels. Compared to October 2009, more consumers report they have reduced spending, or changed providers of, cable TV, wireless or fixed-line voice as in October 2009. Much of that activity seems to be economy related.

Still, according to a new J.D. Power and Associates study, just three percent of pay-to-view television customers report having “cut the cord” and are canceling their television service in favor of other viewing options. For multichannel video service providers, that’s good news. While viewing content on computers is growing, the television remains the central CE device for viewing television content. 

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Jennifer Russell