Cutting The Cord: Are Consumers Spending More Than Ever?

In the latest edition of our series on cutting the cord, we're diving into a tricky question: Do consumers save money by cord-cutting, or are they paying more for a cordless future than at the peak of pay TV? If so, how do companies compete, given the impending recession leading to consumer spending cutbacks? In our first edition, we introduced our AlixPartners' proprietary cord-cutting model, forecasting the continued drop-off in pay TV, which we see accelerating over the next five years. Ultimately, this is making Pay TV a declining asset, with streaming the avenue for video content consumption. Our model shows that patterns in cord-cutting seen earlier this year continue (figure 1). But will consumers be better off financially as the streaming universe expands, requiring multiple subscriptions to get the latest and greatest content?