Verizon CEO just confirmed what many of us have suspected: cord cutting is a problem

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VerizonPeter Kafka writes that:

The party line from cable executives is that the “cord-cutting” phenomenon–consumers swapping cable subscriptions for Internet video–is a myth. Or, at best, greatly exaggerated. Not so, says Verizon CEO Ivan Seidenberg.

Ivan Seidenberg said at the Goldman’s media conference this morning:

“Young people are pretty smart. They’re not going to pay for something they don’t need to. Over the top is going to be a pretty big issue for cable.

We take the over the top issue with video very seriously. I think cable has some life left in its model…but that it is going to get disintermediated over the next several years.”

Isn't this also a challenge for Verizon, with its Fios service (3.5 million customers)?
Seidenberg noted that the TV bundle isn’t going away immediately. But eventually it will.

Seidenberg’s argument:

is that over the top is a much bigger deal for cable guys like Comcast (CMCSA), who have an entire business built around the bundle, than it will be for his company, which is a relative newcomer to video.

Theoretically, he’ll be be able to replace some video subscribers with subs who pay for robust broadband connections. But like it or not, it’s going to happen, he says.



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