In other words: Pay TV executives’ argument that there is little evidence of cord-cutting is “an oversimplification,” the analyst said. “Today’s problem: economically-driven cord-avoiders.”
After all, the economy has at least in part been responsible for fewer new homes subscribing to pay TV. However, “the problem is that the longer the economy remains weak, and if over-the-top options improve, the harder it will be to bring these subs back to pay TV,” Anninger said.
“The real challenge to the pay TV business model are behaviorally-driven cord-nevers,” he said. “These are tomorrow’s householders that are in their teens (and younger) today. They are growing up in an Internet-based video culture, in which the mantra of “why pay for TV?“ and “pay TV is a rip-off,” develop.”
As they age, some of these consumers will choose pay TV substitutes, potentially hurting future pay TV gross adds momentum. Said Anninger: “We will not know the extent of this problem for some time and we need to better understand this group’s behavior before making broader assertions.”
(Source: hollywoodreporter.com)
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