Cutting the cord doesn't really mean cutting the cord

18 October 2015 by Steve Blum

It’s still a battle.

Nearly a quarter of the U.S. population doesn’t have a pay TV subscription, via cable or satellite. A report published by Forrester Research and reported on by the FierceOnlineVideo and the Wall Street Journal says that 24% of U.S. television viewers don’t buy linear cable or satellite packages. What’s interesting, though, is that the number of people who have never been subscribers is three times as high as people who have bought it at one point and then cut the cord, as they say in the cable business.

According to the story in FierceOnlineVideo

Cord-nevers make up 18 percent of the population, compared to cord-cutters who make up just 6 percent of the U.S. population, the report reveals, according to a Wall Street Journal article. Most of those who have never paid a pay-TV subscription are now aged 32 and older, with about 7 percent of cord-nevers ranging between 18 and 31.

Within ten years, the report predicts, only half of television viewers between the ages of 18 and 31 will pay for traditional cable service, relying instead on direct access to programming via the Internet.

Assuming the Federal Communications Commission’s network neutrality standard, or something like it, remains in place and effective, there will be plenty of competition for television viewing dollars. Broadband companies won’t be able to act as gatekeepers, as cable operators have always done and telephone companies have more recently tried to do. But those broadband companies will be able to act as toll takers, particularly in markets – most markets, today – where only one or two can deliver service that’s sufficiently fast and reliable to support a television habit.

So no one is really cutting the cord yet. Well, some are watching via mobile networks, but low data caps combined with high charges for going over will keep it niche market. But the cord is staying and, without competition, so is monopoly pricing.