TV Everywhere

Cord-Cutting Will Be Minimal Over Five-Plus Years: PwC

Consulting Firm Expects Second-Screen Apps to Generate Incremental Ad Revenue 2/20/2013 12:43 PM Eastern

While some industry observers predict the TV industry is on the cusp of a massive, Internet-fueled disruption, business-consulting firm PwC does not expect consumers to abandon pay TV services en masse for at least the next five years, according to a new report.

Not only is the sky not falling, PwC says, but the rise of smartphones and tablets will generate incremental advertising revenue and boost engagement for the TV industry rather than drive so-called “cord cutting.”

“Even though some consumers are cutting the cord, reducing their subscriptions or not subscribing when starting a new home, the impact to the pay TV industry over at least the next five years will be minimal,” PwC said in the report, distributed Wednesday.

The firm continued, “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 limitations such as content discovery issues with [over-the-top] services that need improvement.”

The firm published the conclusions following a debate it hosted during Advertising Week 2012 last October between debate teams from Columbia Business School and the Virginia Commonwealth University’s Brandcenter. The debate focused on the question, “Should advertisers, agencies and the media worry about cord-cutting?”

“While consumers are spending more of their media time on mobile and Internet-enabled devices, TV viewership remains strong,” PwC’s analysts said in the report. “There are multiple concerns about cord cutting, cord trimming (reducing subscription packages), and cord-nevers (younger generations never becoming subscribers), but advertising industry spending remains heavily weighted toward TV.”

The consultancy said it expects second-screen experiences to gain traction and help “generate incremental revenue and attract and retain customer attention.”

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