Cord-cutting — consumers abandoning pay TV for cheaper, more flexible online services — has received a great deal of press lately, and for good reason: it’s a potential game-changer. An increase in viewing options could significantly alter both home entertainment and the companies that have heretofore banked on the insatiable appetite of TV viewers.
Some analysts believe its impact is being overblown, while others point to studies that present consumers brandishing the metaphorical knife. Research group IHS iSuppli found that in Europe at least the impact of cord-cutting was negligible.
Counting telephone, Internet and TV services in the European Union, IHS said that the cable industry’s revenue grew 8 percent to €18.7 billion. The research group cited a nearly 16 percent boost in digital cable subscribers as a major contributing factor to the growth, pushing the total number of cable customers past 100 million – a record for the region.
“Cord cutting is having a major impact on the global cable market – particularly in the United States, where it is starting to cause a decline in subscribers,” said Guy Bisson, IHS television research director. “However, the 2010 results for the European Union show that cord cutting doesn’t mean the end of the world.”
Bisson added that the “strong increases in EU cable Internet and telephony subscribers” also helped make up for “increasing competition.” Cable Internet and telephone subscribers in the European market grew 10.5 percent and 10.8 percent, respectively.
It’s unknown if European Big Cable’s 2011 results will mimic last year’s growth, or take after faltering U.S. numbers.
Last week, Bisson’s fellow analyst Erik Bannon revealed that the American market shed 378,000 customers last quarter due to a poor economy and the lure of non-linear subscription services such as Netflix. The popular streaming service is rumored to launch in Europe early next year.