'Cord-Cutting' No Threat

12:50 PM -- The broadband world was buzzing late last week after The Wall Street Journal reported that Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and some major programmers are in the midst of new negotiations that ultimately would give MSOs permission to offer more long-form TV shows via broadband -- and provide this complementary option to existing cable TV customers. (See Cable-Led Web TV Deals Still Forming and TWC, Comcast to Put Cable Shows Online.)

The popular reason: It's a hedge against a budding "cord-cutting" trend in which cable customers drop their TV subscription and keep their high-speed Internet service as speeds increase and more and more content becomes available via the Web.

There's been some anecdotal evidence of that, but, as Leichtman Research Group Inc. (LRG) president and principal analyst Bruce Leichtman told Cable Digital News last week, research indicates that cord-cutting is not much of a threat yet. "There's no evidence whatsoever of cord-cutting happening. People need to stop being cheerleaders and stop doing mother-in-law research and really analyze this," he said.

Leichtman followed that up today with results from his new report: "Emerging Video Services III." In a survey of 1,250 U.S. households, 34 percent of adults said they view some type of video online at least weekly, and 11 percent do it on a daily basis. The number of adults who tap in at least once a week jumped from 31 percent last year, and 25 percent two years ago. (See Survey: Web Grows, TV Maintains.)

But to hammer home his point about cord-cutting, or a lack thereof, just 1 percent of adults view recent TV shows online daily, and 8 percent weekly. Six percent reported viewing TV shows via the Web on a weekly basis last year, so there's some growth occuring, but not anything explosive.

Those who watch recent TV shows online weekly are no more likely to consider disconnecting their TV subscriptions than others, so the cord-cutting phenomena is far from commonplace, the report finds.

"Time spent watching TV is virtually unchanged from prior years, and multi-channel video subscriptions are at an all-time high despite the challenging economic environment," Leichtman said, in a statement.

LRG also queried a sample of 250 "teens" (ages 12-17), a group that's more likely to embrace Web video. Roughly 18 percent of the folks in that group who watch video online said they "strongly agree" that they now watch TV less often, while 61 percent "strongly disagree."

Although cord-cutting is a potential threat that cable has identified, it's more clear (and probably no big surprise) that a growing number of younger eyeballs continue to seek out entertainment from sources other than the TV, a trend that will present MSOs (and other video service providers as well as programmers) with a different but related type of challenge to overcome in the not-so-distant future.

— Jeff Baumgartner, Site Editor, Cable Digital News

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