Cord Cutting Increases To The Point Where Deniers Must Change Their Tune

When the flat-earthers change their tune about the way the world is shaped  (or, in this case, how motion pictures are being consumed), then it becomes undeniable that the paradigm is changing.

"Cord cutting" is the industry term for people who stop a cable or satellite television service in favor of another (often less expensive and more convenient) option like internet TV.

Craig Moffett, a media business analyst at Sanford C. Bernstein & Company, once characterized cable cord cutters as "the bottom half of the economy... struggling to make ends meet."  In 2010, Mr. Moffett aggressively mocked the idea that people leaving cable companies were "cutting edge" customers who had figured out how to get cable TV content (and more) online in more convenient ways: "The reality is it’s someone who’s 40 years old and poor and settling for a dog’s breakfast of Netflix and short-form video."

Now it seems that it's Mr. Moffett whose diet has changed - and instead of a dog's breakfast - he's eating crow.

On August 7th, 2013 Karl Bode blogged about Craig Moffett's change of heart:

"In his latest [July 15th, 2013] market analysis, Moffett points out that the pay TV industry is down 360,000 subscribers, or 0.3% from last quarter, and the pay TV industry has lost 911,000 subscribers in the last year. Cord cutting skeptics long insisted that as the housing market recovered, so would subscriber numbers -- but that never happened."

Here's how Mr. Moffett seeks to explain how he could have been so wrong:

"Cord cutting used to be a myth. It isn't anymore,” Moffett writes in a new note. “No, the numbers aren’t huge. But they’re statistically significant.""

Of course, as Karl Bode writes, cable TV "cord cutting was never a myth, Moffett was just wrong. Moffett's not alone; ratings firm Nielsen has also long been a staunch cord cutting denier, despite the firm being unable to even track most Internet viewing. When cord cutting could no longer be denied as a legitimate trend, Nielsen simply changed the language they use for these users, replacing the term "cord cutter" with "Zero TV households.""

What makes the 2013 increase in cord cutting especially noteworthy - for people who are thinking about how users get their motion picture content - is that it comes at a time when the old paradigm (more houses = more cable subscriptions) would have predicted an increase in cable subscribers.

Just the opposite is happening.

With more households being added to the US economy - in the first half of 2013, multi-family starts were up close to 34% from the same period in 2012, and single family starts were up 20%  - in the old paradgim experts like Mr. Moffett would expect a robust increase in cable subscriptions. Instead, even as new homes are being added, the cable industry is actually losing customers at a quickening pace.

Now factor in that many people who are cutting the cable TV cord are receiving motion picture content on their mobile devices - and that China is about to add hundreds of millions of smartphone users who never had a cable subscription but are used to watching motion pictures on a PC - and you have a road map for the new paradigm where motion pictures are circulated online and not necessarily through Old World cable companies.