Right now there is a great deal of concern in the pay-TV industry about cord cutting. Some analysts, for instance, are predicting that cable TV won’t even exist by the year 2030 (a claim that we disagree with).
Here is a different way to look at the cord cutting issue, though:
Recent research shows that pay-TV revenues and PPVI and OTT revenues together will reach $283 billion by 2022. Last year, the combined revenue totaled only $239 billion. And by 2022, there will be more than 1 billion new pay-TV subscribers.
So right now, in other words, consumers are still spending a lot of money on video content — a trend that is bound to continue as connectivity, video and device quality all continue to improve in the coming years.
Of course, with more video usage comes more data usage. So cable providers that can successfully transition into broadband providers in the coming years have the opportunity to profit from both OTT and cable customers and absorb losses from cord cutters.
Studies have shown that consumers prefer a mix of both over-the-top (OTT) and traditional television services. What’s more, cord cutting is not typically a forever thing. Many consumers will go through periods of using OTT or cable. Cable providers may just have to get used to a more fragmented customer journey for cable customers in lieu of consistent long term usage.
Remember: Stay optimistic about the future, and keep looking for ways to innovate and make more money. The “cord cutting” conversation does not have to be all doom and gloom.