• by Steve Smith , Staff Writer @popeyesm, March 16, 2011

Whether TV viewers are or are not "cutting the cord" with cable and other services has become the debate du jour. With every industry quarterly report we dicker over its meaning and whether the slow or negative growth in pay TV subscriptions is a sign of people getting their media from other means, namely online. Yesterday's SNL Kagan report showed an end-of-year turnaround in TV subscriptions, so that an early 2010 drop was overtaken by an end-year rush, netting out to a 211,000 increase in subs for the year. Some read this news as reassurance that the myth of the cord cutters was just that, mythical.

Well, maybe. Surely these numbers indicate the incredible appeal of TV generally, still the defining medium of this century. Maybe we are asking the wrong question when we pose an either/or equation, however. According to LEK Consulting, the real threat to pay TV is not customers cutting them off completely and taking the radical turn to the Web. It is more about shifting purchase models that affect all platforms. "Cord trimming" is what LEK is calling a phenomenon it detects in its latest consumer survey.

The company says that to date only about 2% of cable and satellite TV viewers actually have cut off service in favor of other media. They see instead a slow steady reduction of services. Its survey finds 16% of people reporting that they had reduced their monthly TV bill in some way in the last year. These "trimmers" on average were pulling back 25% of their TV spend. But it is less about platforms than it is about models. The losers in this scenario are the a la carte services, not subscriptions. In fact, LEK found that usage of Internet services, Network TV, Cable TV and Local TV all rose in 2010, and all of these work on all-you-can-eat or free models. The models that took the hit were mainly transactional, theater, DVD sales, video on-demand, video rental and even downloads.

In recessionary times people shave rather than cut. They balk at the incremental spend but also tend to see greater value in the subscription. While not surprising, the LEK study also suggests that time is a factor along with money. As consumers got more selective about how they spent their media time, discrete, fee-based media experiences suffered. Even video gaming faced declined, in part because people weren't as eager to invest the time/money. And there was blowback over pricing when it comes to movies, where 56% of respondents told LEK they are going to fewer films because of the ticket price.