Verizon Communications CEO Ivan Seidenberg just confirmed what many industry watchers have suspected: cord cutting is a problem.
All Things Digital's Peter Kafka reported that Seidenberg told attendees at a Goldman Sach's media conference in New York that future generations of consumers won't have any interest in buying service bundles, which can include Internet, pay TV, and telephone.
"Young people are pretty smart. They're not going to pay for something they don't need to," he said.
Seidenberg noted, though, that bundling isn't going away immediately.
It may happen sooner than he thinks. A Time Warner executive said at the same conference that his company expects to see a subscriber decline in the third quarter, although the reason for that fall-off is being blamed on the down economy.
Wall Street isn't having it. Last week, Credit Suisse, a large financial services company, downgraded media stocks and upgraded Netflix, saying its studies show that young adults are now turning to Netflix to acquire film and TV shows.
Now that someone from one of the big pay-TV companies acknowledges what many people have been saying for a long time, perhaps the industry can stop touting those ridiculous surveys and studies that attempt to disprove the existence of cord cutting. They can now get down to competing and offering customers more value for their money.
Some people have downplayed the threat that Web video distributors, such as Netflix, Apple TV, and the upcoming Google TV will pose to the pay-TV industry. That's dangerous thinking. That's how Blockbuster execs thought, and today the once-dominant force in home video filed for bankruptcy reorganization.
The pay TV industry is in a serious fight. And if it fails to acknowledge reality, it's going to go down the same tube.