Report: Cord-Cutting to Have ‘Limited Impact’

LONDON: Just 1.2 million pay-TV consumers canceled their subscriptions in favor of over-the-top video alternatives in 2010, according to a new report from Informa Telecoms Media, reflecting just 0.18 percent of the global pay-TV market.

The number of cord-cutters globally is forecast to rise from last year’s 1.2 million to 16.1 million by 2015, the report says.

“While the impact of cord-cutting on pay TV has been extremely limited to date, this will change as OTT services will continue to improve and become increasingly attractive," said Adam Thomas, senior analyst at Informa Telecoms Media." Connected TVs and set-tops will allow easier access to these services and our forecasts therefore anticipate the number of cord-cutters growing to 16.1 million in 2015. That’s about 2 percent of the total pay-TV subscriber base."

Informa also notes that only 36 percent of global cord-cutters were in the U.S., which is where much of the concern has come from. Indeed, Informa notes that still developing pay-TV markets could be more susceptible to pay-TV losses from OTT services.

“We are already seeing significant numbers of cord-cutters in China, as households are attracted away from cable and IPTV by OTT services such as Tudou and Youku," Thomas added. "While these services contain a fair proportion of pirate content, they also have some legitimate carriage deals. In China there is always a risk that regulatory intervention will radically alter a market but, for now, OTT is emerging as a fully-fledged alternative to the traditional platforms."

The Asia Pacific had 251,000 cord-cutters last year, with forecasts this will rise to 6.3 million by 2015. Europe, with 395,000 cord-cutters in 2010, is expected to see this number grow to 5.5 million by 2015. North America’s cord-cutters are seen as growing from 434,000 in 2010 to 3 million in 2015.