Shocker: Study Finds Cord Cutting Very Real, TV Execs Still Failing To Adapt

You'll perhaps recall that broadcast and cable executives spent years denying that TV cord cutting was even happening. Ultimately that head-in-the-ground thinking "evolved" to the point where sector executives admitted that sure, cord cutters are real, but they're little more than 40-year-old nobodies living in mom's basement -- and not something to actually take seriously. As the data began to indicate that cord cutting was a very real phenomenon that thinking has finally started to subside, though the industry by and large has responded by doubling down on the bad ideas that brought us to this point in the first place.

There's still a sect of broadcast and cable executives and analysts that truly believe this shift from bloated, pricey channel bundles to cheaper, more flexible streaming alternatives is just a fad kooky kids are going through. And there's more than a few sector executives who believe this will all magically end as younger generations procreate and buy new homes. Of course that's not really supported by the facts, with most Millennials and younger generations being "cord nevers" -- who fail to see the point of subscribing to expensive bloated channel bundles in the era of YouTube and Twitch.

A new report by the Diffusion Group highlights again how this isn't just some temporary hiccup in the tastes of fussy viewers. The group predicts that at the current pace of customer defections from cable, the number of US households that subscribe to traditional cable will drop from 81% this year to 60% in 2030:

"Generally, TDG expects that the penetration of live multi-channel pay-TV services will decline from 85% of US households in 2017 to 79% in 2030. While statistically a loss of only 7%, it nonetheless illustrates the ongoing secular decline of a once healthy market space. TDG predicts that, by 2030, roughly 30 million US households will live without an MVPD service of any kind, be it virtual or legacy.

During this time, legacy MVPDs will experience considerable subscriber losses, due not only to long-term industry trends but also growing competition from virtual pay-TV providers. Consequently, legacy pay-TV penetration will fall from 81% of US households in 2017 to 60% in 2030, down 26%. At the same time, virtual pay-TV penetration will grow from roughly 4% of US households to 14%, up 350% but from a very small base.

And while some traditional, legacy TV viewers will flock to "virtual" streaming alternatives like AT&T's DirecTV Now or Dish's Sling TV, those services cost significantly less than traditional cable options (which usually clock in at $110 or more per month). That's why most cable providers have been so busy imposing arbitrary and unnecessary usage caps and overage fees on broadband connections, as it allows them to counter these lost TV revenues (with the added bonus of hamstringing competing services that aren't zero rated, something you'll see a lot more of thanks to the looming death of net neutrality).

Needless to say, the report highlights how cable providers still need to get out ahead of this shift, instead of just paying empty lip service to adaptation:

"TDG said early on that the future of TV was an app. Unfortunately, most incumbent MVPDs weren't taking notes," notes Joel Espelien, TDG Senior Analyst. "The question is no longer if the future of TV is an app, but how quickly and economically incumbents can adapt to this truth and transition to an all-broadband app-based live multi-channel system."

Again though, industry executives weren't just "not taking notes," they were actively trying to ignore a massive, wholesale shift in how their business sector operates. Most of the entrenched cable operators could easily nip this entire shift in the bud by simply competing on price and bundle flexibility. But instead, countless cable and broadcast executives continue to just double down on legacy turf protection and rampant rate hikes -- in the false belief that the traditional TV cash cow they've been milking for decades is somehow immortal.