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By 2025, Half of Young Adults Won't Pay for Cable or Satellite

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In only 10 years, the pay TV market will be a vastly different place, according to the report "Young TV Cord-Nevers Have Arrived and Are Here to Stay," created by Forrester Research principal analyst James L. McQuivey. The report predicts that in 2025, half of adults 18 to 31 won't have pay TV subscriptions: 15 percent will be cord-cutters (who cancelled their pay TV subscriptions) and 35 percent will be cord-nevers (who never had a subscription).

Targeted at large programmers and operators, the report doesn't ring the panic bells just yet. "Rumors of the death of pay TV are greatly exaggerated," it says, noting that three-quarters of the U.S. population currently have pay TV subscriptions, and a modest six percent are now cord-cutters.

The report explains the thinking behind cord-nevers, who are now 18 percent of the population. Young cord-nevers are different from cord-cutters, it says: "While older cord-nevers understood that they would have to live without access to some of the best programming by forgoing pay TV service, younger digital cord- nevers have grown up believing that they can have all of the TV they want without paying a traditional TV distributor for it."

The report suggests several business decisions programmers can take now to reach these young viewers, such as supporting linear streaming options like Sling TV and CBS All Access, rather than on-demand options.

Finally, the report offers harsh words for Apple, saying that young cord-nevers rarely look to iTunes for video, and that Apple will forever play catch-up to Netflix.

The full 13-page report is available for $499.

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Mon., July 7, by Bill Greenwood