Why The Wall Street Journal's Prediction that Digital Cord-Cutters in 2017 Will Be a Minority is Flawed

If you are a cable TV exec and read this article posted on WSJ's website the other day, you may be jumping up and down with joy.

It predicts that because there is no iPhone device yet to accelerate cord-cutting, in 2017 most people will simply keep their expensive, commercial ridden, channel bloated cable TV or satellite subscriptions.

While this may be wishful thinking, everything we have seen and read lately shows the opposite is true and here are the facts to prove it.

"According to technology strategist Michael Wolf. In contrast to the mass shift away from home telephones to cellphones, one of the biggest technology transitions, the ongoing move away from traditional pay television has been slow. A presentation prepared by Mr. Wolf’s consulting firm Activate Inc. for WSJDLive, The Wall Street Journal’s global tech conference, said the percentage of U.S. households with landline phones dropped steadily from 94% in 2000 to 51% by 2014. By contrast, the rate of consumers cutting cable and other forms of paid television has been much more gradual. From 2011 to 2015, the percentage of households with pay TV slid from 94.3% to 87.5%, Activate estimated." You can read the full article here

Here is the thing about consultants, many times companies hire them and pay them a lot of money to simply tell them what they want to hear. They then look for and provide facts that support the desired outcome.

Mr. Wolf's firm shows data that supports their conclusion and yes compared to the amount of people that still subscribe to cable, cord-cutters are still a minority.

On the other hand, we have lived and breathed cord-cutting now for many years and by listening to other cord-cutters daily on various Facebook groups and other forums with many thousands of members, we are here to tell you if you are a cable TV or media exec, you still have reasons for concern.

Cord-cutting is not going away anytime soon simply because some in the industry may wish it to be so. Overall, the number of people subscribing to cable is continuing to drop every year.

Here are some studies and facts presented from other data research firms from this past year:

Cord Cutting Accelerates: Study Finds 25% of U.S. Homes Don’t Have Pay TV Service

"The latest numbers on cord-cutting from research firm GfK might give a few people some sleepless nights. A quarter — yes, a full 25% — of U.S. homes don’t subscribe to a pay-TV service, according to GfK’s 2016 Ownership and Trend Report. About 17% rely only on broadcast signals for their TV needs, while 6% only use the internet to watch their favorite shows on a TV set, using either a device like a Roku or Apple TV or a Smart TV" Source Variety - Read more

812,000 pay-TV subscribers cut the cord in the second quarter of 2016

"The U.S. television industry continues to grapple with the flight of customers who are ditching their pay-TV service at a rapid clip.

In a grim reminder of the challenges facing media companies, an estimated 812,000 subscribers pulled the plug on their pay-television service in the second quarter, according to a study by consulting firm SNL Kagan." Source L.A. Time - Read more

Not all bad news for Cable TV Companies

"Comcast announced Wednesday that it gained a net 32,000 cable television subscribers during the July-through-September quarter, compared with a loss of 48,000 in the same quarter last year."
Source Arcamax

This may be short lived as soon as their discount bundles run out many customers may simply look for other lower cost streaming alternatives. The 3rd quarter is also when all the new shows come out and this reversal may be short lived.

Many kids growing up today are already embracing streaming TV and will be even less inclined to pay for expensive TV bundles and simple choose to use Netflix, YouTube and Roku channels like these to watch their content.

AT&T with DirecTV, Dish and Sling TV are all now offer streaming TV bundles. They hope to try and entice cord-cutters back into subscribing to a bundled package that costs anywhere from $20 to $40 a month.

Some may certainly take advantage of this as a relief from $100 cable TV bills. How long will it be until the costs on these packages start to creep up?

The industry still has some soul searching to do and will need to come up with a package of content that appeals to a more technical savvy streaming TV audience at an affordable price. Or, the cord cutting trend will continue.

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