As the chart below shows, the proportion of respondents subscribing to pay-TV services actually went up in all markets in 2011. This is despite the fact that in 2010 a relatively large number of respondents (about a quarter in France and Japan) said that they were intending to dispense with their subscriptions in favour of free or paid-for streamed alternatives. So why didn’t they? The answer is two-fold, I think. Firstly the number of people with the equipment to actually cut the cord is fairly limited as a proportion of the total. Most consumers with connected-ready TVs and Blu-ray players haven’t actually connected them because they lack the requisite (and expensive) Wi-fi dongle and the TV is too far from their Internet router. Those with connected consoles are more likely to use them for gaming than TV streaming. The second, and more important, reason is that the online products that exist today just aren’t as good as their broadcast equivalents. IP isn’t an efficient way of delivering high-reliability, high-definition pictures. “Best endeavours” is fine for overall resilience of the pipe, but not for broadcast quality delivery.Furthermore, although streamed movie services are good for... movies... they don’t offer the “on the day of release” high concept programming and entertainment content that audiences love or access to premium sports, exclusive access to which costs far more cash than the online services can afford.
Truth be told, movies are a small part of the home entertainment ecosystem. Streaming is a (potential) substitute for DVD through the post, which was a substitute for physical rental. Not TV.Globally, subscription VOD and DVD by mail both grew – they are content extenders and may replace some DVD purchasing and movie channels. They cost much the same as the latter though, so are easily defended by the Pay TV industry through services like Sky Anytime+ that offer on-demand movies alongside broadcast.Finally, it’s worth noting that the major reason people watch TV is the social experience. TV is the media type that respondents in all markets talked about most regularly at the watercooler, on the living room sofa and over social networks. If you cut the cord and let the audience decide what to watch, then you’d lose all that. So I don’t think they’ll be cutting it all that soon.