Florence Le Borgne, Directrice d’études, Responsable de la Practice “TV & contenus numériques”, DigiWorld by IDATE Florence, directrice d’études, a rejoint l’IDATE en juillet 1998. Elle occupe les fonctions de responsable de la practice TV & Contenus numériques. Elle y suit plus particulièrement les sujets relatifs au développement du numérique dans l’audiovisuel (télévision hertzienne, câble, satellite, ADSL ; télévision mobile ; cinéma numérique ; vidéo et télévision sur Internet) sous les aspects à la fois économiques et stratégiques, aussi bien aux niveaux macro que micro-économiques. Elle s’intéresse aussi plus généralement à la stratégie des groupes audiovisuels. Elle occupait précédemment les fonctions de chargée d’études à l’Agence Régionale de Développement du Nord-Pas de Calais au sein de la cellule « Observation Economique ». Ses travaux ont principalement porté sur la société de l’information, le développement du télétravail et la maîtrise des technologies-clés. Florence est diplômée de l’Ecole des Hautes Etudes Commerciales de Lille (EDHEC).

1. Video Cord-cutting: Much
ado about nothing?
Contact
Florence LE BORGNE
Head of TV & Digital Content Practice
f.leborgne@idate.fr
+33 4 67 14 44 43
Consulting . Research . DigiWorld Institute
20th November 2013

2. Cord-cutting? What does it mean?
A still vague notion:
“ Cord cutting refers to the process of cutting expensive cable
connections in order to change to a low-cost TV channel
subscription through over-the-air (OT) free broadcast through
antenna, or over-the-top (OTT) broadcast over the Internet. ”
(Techopedia)
“ Cord cutting is the practice of stopping a cable or satellite
television service in favor of less expensive options, such as
Internet TV ”
(WhatIs.com)
“ Cord cutting:
1/ Switching from cable or satellite TV to Internet-based TV
2/ Switching from a wired technology to wireless. For example,
moving from cable TV to satellite TV. ”
(Computer Desktop Encyclopedia)
But closely linked to the rapid take-off of video Internet services such as Hulu and Netflix

3. What evidence?
A still dynamic pay-TV market in the USA…
+22.6%
84.6 million
subs to pay-tv
80
70
60
50
40
30
20
10
0
100.9 million
subs to pay-tv

4. What evidence?
…as well as in EU5
+54.5%
40.4 million
subs to pay-tv
35
30
25
20
15
10
5
0
62.5 million
subs to pay-tv

5. Mixed signals
49% of 18-24 living at home with their parents said they were
highly inclined to sign up for an online subscription video service
once they move out on their own, compared to only 31% that
were highly inclined to sign up for a traditional pay-TV service.
(TDG, Late Millennials: A Study in Media Behavior, August 2013)
18-24 year-old moving into their first non-college home are as
likely to sign up immediately for a cable, satellite or telco TV
service as they are to delay or pass up on it altogether.
By the time they turn 24, 89% living on their own subscribe to a
traditional pay-TV service, which is about the average
penetration of pay-TV across all broadband households.
(TDG, Late Millennials: A Study in Media Behavior, August 2013)
47% of US consumers in the 13-to-54 demographic have used
Netflix at some point, but 51% of the streaming service’s
customers would churn if their pay TV provider offered a similar
service.
(GfK, Over the Top TV, July 2013)
Viewing numbers for series including Mad Men, Breaking Bad as
well as older shows including Heroes outstripped those for its
USD100 million (EUR76 million) original series House of Cards.
(GfK, Over the Top TV, July 2013)

6. Much ado about nothing?
Evidence is not evident, but:
-
The success of Netflix is evident
The move from incumbent pay-tv providers towards OTT services is evident
The interest of Google for Internet TV services is evident
…
Netflix has definitely introduced a break in video consumption
- A first step towards a new audiovisual landscape?
Some questions to be addressed:
-
What new OTT services?
What are the end-user expectations?
Who will be the main market players?
What risks of disintermediation for incumbent pay-TV providers?
Are the STB the gateway to control the TV set?
How the regulation can help or hinder the development of OTT services?
What future for pay-TV and OTT services by 2018?