Cord-cutting will have minimum impact, says PwC

Cord-cutting is likely to have a minimum impact on pay TV for the next five years at least, according to PwC.

Following its sponsorship of a debate between Columbia Business School and the Virginia Commonwealth University Brandcenter on the question of whether advertisers and the media industry should worry about cord-cutting, PwC came down on the side of the Virginia Commonwealth team’s contention that traditional TV viewing was still popular and would be boosted by TV Everywhere services as well as the continued support of advertisers.

While agreeing that “consumers are spending more of their media time on mobile and internet-enabled devices”, PwC concluded that “TV viewership remains strong”.

PwC said: “Even though some consumers are cutting the cord, reducing their subscriptions, or now subscribing when starting a new home, the impact to the pay TV industry over at least the next five years will be minimal. Traditional TV viewing is still popular, ubiquitous TV content-on-the-go packages are becoming commonplace, TV advertising dollars continue to grow, and there are limitation such as content discovery issues with OTT services that need improvement, second screen experiences are gaining traction, and second screen offerings will help generate incremental revenue and attract and retain customer attention.”

PwC said that broadcasters were increasingly investing in second screen applications and noted that social TV activity nearly tripled to 95 million interactions on major social network in the second quarter of 2012.

While accepting that traditional TV viewing was declining, PwC said that broadcasters were adapting to the changes and noted that “TV continues to be the most effective way for advertisers to reach large audiences”.

It cited eMarketer’s assessment that TV was projected to take a 39% advertising market share versus 22% for the internet.