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Cord-cutting to hit Europe in 2013

Even though the majority of European pay-TV operators feel immune from US-style cord-cutting, this is a false sense of security, new research from IDATE is warning.

Having just published an in-depth study on the phenomenon of cord-cutting, based on an analysis of the North American market, IDATE feels that lessons can and should be drawn for Europe, where certain weakness within the European audiovisual industry could create a US-style scenario.

Looking at the US, the analyst feels that cord-cutting, in addition to a general traditional television and video services churn, is emerging and indicates a much broader set of upheavals in the TV industry whose context it describes as “very tense”. In addition, IDATE believes that there is a permanent instability in the market and that the current inability to devise sustainable collaboration schemes only increases the risk. It regards disintermediation as the key issue facing the US market and potentially Europe.

“OTT (over-the-top) video services will continue to expand and influence the TV access market because they meet user demand: flexibility and richness of content offerings, user-friendliness (these new entrants usually offer much more accomplished consumption interfaces), prices (a monthly subscription to Netflix equals the purchase price of a DVD), anywhere, any terminal usage patterns – unlike operators' segmented offerings,” said Jacques Bajon, project leader of the study, “More importantly, if Google's gamble pays off, the changes could be much more fundamental and rapid”.

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