Forecasting Video Cord-Cutting: The Bypass of Traditional Pay Television
Following the substitution of mobile phones for fixed-line phones (“voice cord-cutting”), a similar transition is now occurring for video services. In the United States, traditional pay television service providers are experiencing some revenue losses and slowdowns. Also, consumers are increasingly streaming or downloading long-form video programming (mainly movies and TV shows). This phenomenon—described as “video cord-cutting” or “over-the-top (OTT) bypass”—suggests that the business models of traditional TV service providers are under threat. There is, however, considerable debate about the severity of that threat.
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