Communacopia and the cord cutting boogeyman

Communacopia last week provided its normal abundance of news about the media industry. It also produced an array of positions on cord cutting, or the lack of the same.

The "we don't see it happening" side predictably included Disney CEO Bob Iger who, after bemoaning the lack of respect Disney gets from Wall Street, said: "We have not seen any evidence of cord cutting... Especially given the economy, we thought that was great news. The channel business is not only alive and well, but doing better" than many believed.

Comcast CFO Michael Angelakis concurred, saying, "When people say there's cord cutting, we really just don't see it. And when we think about cord cutting or the flavor of the day, we look at that as primarily competition to our VOD business, not to our core business."

Of course, that was during the same presentation he talked about the relaunch of Xfinity, Comcast's own over-the-top solution the MSO is putting out there so its customers--who aren't cutting the cord?--"don't feel they need an alternative."

On the "snip" side of things, one predictable, and one far less so, executive.

IAC's Barry Diller, one-time head of Paramount Pictures and later a creator of Fox Broadcasting, might have more reason to see cord-cutting as only a minor event as far as his companies are concerned. But his background gives him the chops to talk about it. His take? Cord cutting is the real deal, and the changing nature of online video will have a huge effect on entertainment's distribution chain. "The 'a la carting of life' becomes possible for the first time once you have a screen of sufficient size that connects you to this world of possibilities that is the Internet," he said.

TiVo's CEO Tom Rogers agreed, saying the economy and technology are affecting the way consumers see their pay-TV packages. He pointed out that many are looking for alternatives online, saying, "That's going to grow as a trend," adding that he expected online video consumption to grow tenfold, to a full 10 percent of total TV viewing time.

But the coup de grace was, without question delivered by Verizon CEO Ivan Seidenberg who, without question, would rather be able to put to rest the cord-cutting discussion.

Instead, bringing his ongoing experience with the erosion of his company's landline legacy business by the technology of wireless communications, he struck a note of clarity, summing the future up this way: "Young people are pretty smart. They're not going to pay for something they don't need to."

And, even though Verizon offers its own pay-TV option, FiOS TV to some 3.5 million subscribers, it's a relatively small portion of the company's overall business. Nonetheless, he says, "We take the over the top issue with video very seriously. I think cable has some life left in its model... but that it is going to get disintermediated over the next several years.

"I've seen the movie. If you remain static too long, the technology is going to nibble at you on the edges, and you have to be prepared for it."

And, of course, there's yet another cord-cutting study...

In what seems to be a weekly occurrence, another study has come in over the transom, this one from In-Stat. Principal analyst Mike Paxton says the 167,000 subs cable lost last quarter aren't part of any cord-cutting trend, but the product of a weak economy that continues to have Americans counting their pennies.

"While growing availability of over-the-top Internet video is spurring talk of mass 'cord cutting,' this decline is not about cancelling pay TV in favor of Internet video," he wrote. "The main driver of these subscriber declines is the struggling U.S. economy and high unemployment."

That may be so, but, as Bernstein Research's Craig Moffett recently said, even though the economy is rebounding, "the cord cutting boogeyman is now back."

Honestly, it's never left, and Seidenberg knows it. -Jim

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