We are now in the midst of a shift of how we consume video. When I was a kid, it was three broadcast networks and a handful of local independents. You had to watch TV shows at the time of their original broadcast.

Today, I watch Hulu and I stream Netflix, but I mostly watch cable TV, whether live, from my DVR or via VOD.

Some observers claim that a huge change is happening, with a significant number of consumers opting out of the current multichannel video system entirely (a trend called “cord-cutting”). If that’s true, we should see a drop in subscriptions demonstrating this exodus, but it just isn’t happening.

Big Scary Numbers

Recently, two surveys along these lines received a lot of coverage. And the word “surveys” is important, because these reports compile a small sampling of consumers’ past and probable future behavior,  as opposed to actually measuring consumer behavior over time.

The Yankee Group study claimed that, over the next year, one out of eight consumers planned to “cut off their pay TV services and use their PCs, gaming consoles and other connected devices to access video programming instead.” (Here’s a write-up from DSLReports and a post from one of the study’s authors.)

[EDITOR’S NOTE #1: It’s important to note that the Yankee study actually says that customers will cut or reduce their service, which is an important distinction. Trimming back by eliminating a DVR or cutting a premium service is not the same as canceling.]

The Convergence Consulting Group said in a report that cord-cutting was having an impact on multichannel video subscriptions.

[For 2008 and 2009] almost 800,000 US households had cut their TV subscriptions (to rely solely on Online, Netflix, OTA [over-the-air broadcast], etc). We forecast cord cutters will grow to 1.6 million households by year-end 2011.

Since there were 99.9 million multichannel video subscriptions at year-end 2009, this would be  less than one percentage point of the base, but this TechCrunch post from April 13th made it sound like a big deal.  Just this week, Daisy Whitney’s New Media Minute focused on the Yankee Group claims, as did this Denver Post article. From two weeks ago, here’s an NPR report that quotes the Convergence numbers.

[EDITOR’S NOTE #2: The Convergence report notes that 2 million subscribers were added in 2009 (up from 1.46M for '08) and they predict 1.8M additional subs for 2010 and 1.65M for 2011. By their own math, 2.6 million new subs - 0.6 million cutting the cord = 2.0 million net new MVPD subs.]

(By the way, this Retrevo Pulse Report made similar cord-cutting claims, but didn’t seem to get quite the same coverage as the Yankee and Convergence reports.)

Where Is the Subscriber Migration?

This certainly sounds ominous. “One in 8 to cancel this year!” “Cord-cutting to double over two-year period!” Run for the hills!

NCTA recently held its annual conference, The Cable Show. That week, SNL Kagan released a new report that said that “more people are paying for TV” (about 100 million to be specific). Comcast CEO Brian Roberts scoffed at the idea of a massive cord-cutting trend.

The month of May also brought us the Q1 financial reports from multichannel video providers. They must be feeling the pinch, right? Even a little bit?

Ten of the 12 largest video providers are public companies which represent more than 91 percent of the marketplace collectively reported that 591,000 MVPD subscriptions were added in Q1. Occupied households only increased by 139,000 during this period, so the bulk of the increase in subs occurred within existing households.

These figures fluctuate over the course of the year. For example, Q2 traditionally shows a dip, as students leave college for home and snowbirds cancel their temporary subscriptions. Looking at last year, SNL Kagan showed an increase of 1.8 million MVPD subscriptions in 2009. Kagan also said that 500,000 subscriptions were added in 2008 and nearly 2 million subscriptions were added in 2007.

If accurate, Yankee’s “1 in 8” prediction would mean that 12.5 million subscriptions would need to be canceled by next April (Although, this forecast includes service reductions, not just outright cancellations). If nothing else, I guess they’ll still be able to yell, “April Fools!”