Have consumers lost that loving feeling for pay-TV?


Retransmission battles continue two weeks into the New Year, with consumers continuing to get the short end of the stick as operators and content owners rake their winnings into neat piles and dream bigger dreams. Unfortunately, few of those dreams really seem to involve making their customers' lives any better--an antiquated idea, I know, but a thought worth considering since they literally are the lifeblood of the industry.

And, speaking of that lifeblood, a report from Deloitte last week about cord cutting has to be sparking at least a bit of concern in the C-suites that there may be trouble on the horizon.

Deloitte's research revealed some stark numbers about where the industry could be heading (can you say "pipe?" I knew you could).

On the bright side, Deloitte found that "only" 7 percent of matures had cut the cord in 2011, and only 5 percent were even considering it.

Ad that's pretty much where the good news ends.

Deloitte reported 11 percent of Boomers said they had cut the cord and 7 percent were planning to; 7 percent of Gen Xers cut the cord and 13 percent said they were considering doing so; 9 percent of Leading Millennials cut the cord to pay TV, a whopping 19 percent were considering doing so; 10 percent of Trailing Millennials had cut the cord and 10 percent were considering it. Overall, 20 percent of U.S. households said they either cut the cord in 2011 or that they were considering it.

Deloitte's State of the Media Democracy polled some 2,000 people, and there's always room for error. But is the margin or error big enough to make the numbers-especially the finding that 19 percent to 23-28 year olds are considering cutting the cord-moot?

I'm a dedicated TV guy. Love watching football and do a fair amount of VOD, but my $248 cable bill that arrived this week caused me to reconsider a bit. I looked at the $2,976 for a year and started thinking about the other things I could do with that cash. A ticket to Europe was the leader on the luxury side.

While I haven't acted to cut the cord (despite the temptation), Deloitte's numbers contend that a fair number have. And, they show that viewers continue to migrate toward online services like Netflix.

Deloitte said the number of people who said they use streaming services like Netflix (Nasdaq: NFLX) has increased from 4 percent in 2009 to 14 percent in 2011. But, among younger consumers, those 14-28 year olds, the number was closer to 20 percent.

Is cord cutting real? More importantly, can service providers afford to ignore the potential that it's not?--Jim