Cord cutting less threat to pay-TV providers than some say

IMS Research has released its forecast for cable DTV subscriber growth in the United States and other pay-TV providers and is projecting growth, rather than a decline anticipated by some observers due to consumers cutting the cord in favor of over-the-top (OTT) video delivery.

The research firm projects the number of U.S. cable DTV subscribers to increase by 7.8 million from the end of 2010 to the end of 2015, even as the platform as a whole is forecast to drop by 2.75 million subscribers during the same period. IMS Research also forecasts a compounded average annual growth of 2.5 percent in satellite DTV homes and 20.1 percent in IPTV homes over the period.

Despite various research firms’ warnings about OTT video potentially causing large-scale subscriber losses for the pay-TV industry, IMS Research continues to see overall health.

“The economic downtown continues to challenge consumers’ commitment to expensive services; however, we cannot assume everyone that is giving up their pay-TV subscriptions right now is moving to paid or even free OTT services,” said IMS Research senior analyst Anna Maxbauer. “We also expect that a share of consumers will come back to pay-TV at some point, especially as the economy improves.”

Cord cutters are confronted with “considerable tradeoffs” in the availability of content, said Paul Erickson, IMS Research senior analyst and author of the upcoming “OTT Video – Hardware and Connectivity.”

“People will continue to consume a mix of OTT and traditional pay-TV for a while to come,” he said. “Current-day claims that OTT video is a significant cord-cutting threat seem overstated and also fail to recognize that the pay-TV industry is already busy working on OTT delivery methods of their own.”