Wall Street's Still Downplaying TV Cord Cutting As Irrelevant Many long-time readers may remember Craig Moffett, a former Sanford Bernstein Wall Street analyst that made a name for himself often being quite wrong about things, whether that involved maligning network upgrades, declaring sectors like wireless were on the precipice of collapse, or heralding usage caps as the "next generation of communications." Moffett also was at the forefront of denying that cord cutting was real, and when he could be bothered to acknowledge the trend he tried to insist these users were unemployed nobodies living in their parents basements.

This is only brought up because Moffett, now at his own firm, has taken a complete 180 on cord cutting in recent months, consistently pointing out that cord cutters and "cord nevers" are consistently a growing part of the market and tend to be young, educated, and gainfully employed. But while Moffett may have changed his tune, his old firm hasn't shifted its thinking much. In a new research note to investors, Sanford Bernstein analyst Todd Juenger proclaims that none of this year's Internet video options (whether that's Sony's Playstation Vue, HBO Go or Apple's upcoming offering) will succeed, and that cord cutting is never going to happen at any meaningful scale: quote: "Cord-cutting, in large numbers, isn't likely to happen," Juenger said. "It's one of those ideas that sounds great in the abstract but crumbles when faced with the reality. OTT services seem poised to garner few subscribers, which is more good news than bad. We believe it's better for the pay-TV ecosystem to remain in the status quo than to add millions of OTT subscribers at the cost of blowing the whole system apart." Surely there's something between "blowing the whole system apart" and maintaining an unpopular status quo that the cable industry can explore? Juenger's quick to note that the cable industry can fight back with cheaper bundle options, but with limited competition in so many markets, many operators resist pricing movement of any kind. It's worth noting Juenger's claims are based on a sample set of Surely there's something between "blowing the whole system apart" and maintaining an unpopular status quo that the cable industry can explore? Juenger's quick to note that the cable industry can fight back with cheaper bundle options, but with limited competition in so many markets, many operators resist pricing movement of any kind. It's worth noting Juenger's claims are based on a sample set of around 18 users Still, Juenger's analysis seems based on the current argument-du-jour against cord cutting: it's not a good value because you need to add up dozens of services to get the same content you enjoy on TV, by which point you're spending the same as traditional cable -- making the endeavor not worth it. This is a refrain you'll see time and time and time again in media conversations discussing the new crop of Internet video services. This line of thinking ignores two things. One, people often pirate some of this content to save money. Most mainstream outlets and analyst omit mentioning this for fear it suggests they advocate the behavior, but whether you agree with it or not doesn't negate the fact it's happening -- and certainly doesn't warrant excluding the reality in analysis. Two, cord cutters aren't trying to precisely match the offerings of cable TV -- because many are tired of the traditional offerings of cable TV. They're building their own options after the cable industry refused to give them more flexible pricing and bundles.

quote: Not so fast, says analyst Craig Moffett: He thinks the pay-TV business lost 1.4 million subscribers in the last year. “Cord cutting appears to have accelerated markedly,” the MoffettNathanson analyst writes.Moffett — who used to dismiss the idea of cord cutting but changed his mind a couple years ago — argues that looking at pay-TV subscription totals (which went up by about 100,000 last quarter) on their own doesn’t paint the full picture. His analysis of the market also includes the number of occupied homes in the U.S., which jumped dramatically in the last 12 months. And since “new household formation” used to mean “more pay TV subscribers” but doesn’t seem to mean that anymore, Moffett is chalking that up as a loss for the TV guys. While it's true the lion's share of pay TV consumers whine a lot but don't cancel, they've historically not had very many options. 2015 is finally the year we're just starting to see Internet video take off thanks to loosening broadcaster licensing, even if some of these early services have Meanwhile, while nobody denies cord cutting remains a small-but-growing-phenomenon, Juenger's former colleague Moffett points out that just counting subscriber totals isn't really telling the whole picture While it's true the lion's share of pay TV consumers whine a lot but don't cancel, they've historically not had very many options. 2015 is finally the year we'reto see Internet video take off thanks to loosening broadcaster licensing, even if some of these early services have their share of warts . To declare these services dead on arrival and cord cutting a largely irrelevant phenomenon doesn't seem like a particularly smart bet in the face of the tidal wave of change that's staring down the cable sector over the next five to ten years.







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