Google is just saying empty words. Anyone with an ounce of sense can see that the internet has consistently had the effect of disintermediation and opening up the playing field. This has has the result of reducing the profitability of existing player and creating new players both small and big.
Yet the entertainment industry (both content producers and distributors, which are sometimes one and the same) seems to STILL be living under the stone age delusion that as continent distribution moves to the web, they can all demand the same margins and profits as the did before. And that all of them have the right to continue to exist.
This is sheer delusion. No industry has done this since the internet has grown. It doesnt work that way.
Also, the issue isnt purely about cutting cords at all - its about customers who will never have had a cord to cut in the first place, much like today there are people who have never had a fixed phone line in their house - all they know is mobile phones. For those type of customers - the ones who have not had a cable line before and have grown up on internet-based video entertainment, the existing cable players are just one useless middleman - they dont need in the first place. And those people - the Youtube generation - have been quietly raised from teenage years by Google via Youtube. Their numbers will only continue to grow.
The smart ones among them had better get down to changing their business models, because they are not all going to continue living in big fat mansions in Hollywoood. The internet dont work that way.
Besides, the longer these dinosaurs hold out, the more they are giving a head start to new smaller players who will sieze advantage of this new beachhead that Google has put into the living room of the average consumer. For now, yes there is demand for the TV shows that you see on cable TV. But ultimately Google TV is going to give rise to popular shows that were never on traditional TV in the first place.
Of course this is scary to the existing hollywood fat cats. So Google is placating them with empty words. But empty words is all it is - because Google knows as well as anyone what the internet does to traditional businesses who refuse to change.