Cord cutting appears to be more hype than substance
There is a lot of discussion within the industry regarding the impact of ‘cord cutting,’ where subscribers cancel their pay-TV subscription in favor of free or less expensive OTT offers from companies like Netflix or Hulu. But as market research firm Strategy Analytics points out, the numbers don’t match the hype. In fact pay-TV subscriptions are still growing in North America http://www.strategyanalytics.com/default.aspx?mod=pressreleaseviewer&a0=5245.
“Digital subscriptions will increase from 114 million in 2011 to 129 million in 2016, implying a five-year Compound Annual Growth Rate (CAGR) of 2.36 percent. This is very welcome news for service providers in a highly saturated North American Pay TV market,” reports Strategy Analytics in their North America Digital Television Forecast: 1H'12 report.
Traditional basic cable TV subscriptions is the only pay-TV category in decline, according to Strategy Analytics. Every other pay-TV option is growing, including digital cable, IPTV, and satellite TV. Digital cable subscribers which totaled 49 million in 2011 will grow to nearly 54 million by 2016. IPTV subscribers continue to grow as well, from 8 million subscribers in 2011 to 20 million in 2016. It appears as if OTT based cord cutting has a long way to go before we will start to see it impact traditional pay-TV services.