Research: Cord cutting's still all talk; IPTV on a growth trajectory

There's been a lot of talk about "cord cutting" and how it's going to destroy the North American wireline digital TV business but, for now at least, there's more evidence that the talk is just talk and it ain't doing the walk, research from Strategy Analytics seems to conclude.

In fact, when it all breaks down, the research shows that IPTV subscribership will nearly double in the next four years, jumping from 8 million subs in 2011 to 20 million in 2016.

"Cord cutting could still have an impact on the pay TV market so we keep a close eye on the trends and activities of pay TV consumers. However, without a competitive level of content, alternative services have yet to offer a compelling alternative to the traditional pay TV channel lineup," said Jason Blackwell, director of Service Provider Strategies at Strategy Analytics.

Blackwell was basing his opinion on a recently completed report, North American Digital Television Forecast: 1H'12, that was released by Strategy Analytics. The research, after looking at the DTV business, saw that digital subscriptions will increase from 114 million in 2011 to 129 million in 2016, "implying a five-year Compound Annual Growth Rate (CAGR) of 2.36 percent."

Cord cutting might be having some impact, but it won't drive down subscriber numbers, the report suggested. The biggest impact will come from subscribers moving around the space. The overall cable-TV market will lose subscribers but digital cable subscribers will grow from 49 million to 54 million and IPTV subscribers will bulk up from 8 million to 20 million by 2016.

That's a more relevant trend to watch, in fact.

"Cable has been weakening for several quarters with most operators losing subscribers," Richard Fonetes, an analyst in the Strategy Analytics' Service Provider Strategies group said. "Second screen TV Everywhere and other new services from cable operators will help slow these losses and keep higher value--meaning higher Average Revenue Per User (ARPU) digital subscribers in place."

Of course TV Everywhere is easier to do when you're already IP, so that could account for the numbers of new IPTV subs, as could the fact that traditional cable TV providers are experiencing new competition from outside IPTV players for the first time in their history.

For more:
 - see the Strategy Analytics release

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