The Truth and Distraction of U.S. Cord Cutting
Thanks to coverage that simultaneously over and under-exaggerates the behavior, the cutter narrative remains profoundly misunderstood some six years after it first emerged. Even still, the figure itself remains more of a symptom than it is a disease - and to focus on it is to ignore the underlying condition. But like all symptoms, it must first be properly understood.
After decades of growth, the Pay TV ecosystem experienced its first quarterly net subscriber decline in the third quarter of 2010. In the years since, the concept of “cord cutters” – in addition to that of “cord shavers” and “cord nevers” – has dominated industry conversation and characterized its fears. Despite this, the cord cutter narrative remains profoundly misunderstood, largely as a result of media coverage that simultaneously over and under-exaggerates the behavior. Even still, the figure itself is a symptom, not a disease – and like any symptom, it presents earlier and more strongly with some patients (customers), than with others. To focus one’s business, programming and distribution strategies on it is to ignore the underlying condition. First, we need to properly understand it – and thanks to new research from MoffettNathanson, we finally can.
During the past five and a half years, the cable ecosystem has been hit with heavy losses. Nearly 8.9M net subscribers have been lost (versus 3.3M in net gains from Q3 2004 to Q4 2009) – a fact obsessed upon by journalists and bloggers alike. But at the same time – and with significantly less media coverage – Satellite (DirecTV and Dish) and Telco (i.e. AT&T U-verse and Verizon FiOS) MVPDs have surged to the point of offsetting (or reclaiming) nearly 95% of these net losses.
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