Has cable TV seen its day? If so, what’s next? It has been struggling against cord cutting and increasing competitive pressure for more years than most realize. In fact, traditional cable TV is even disappearing from the marketplace. So, let’s take a look at what is happening, where the cable TV and broadband loss is going and what the cable TV companies need to do before it’s too late.
Yesterday, the lead service was cable TV. Today, it is broadband. And both are dropping like a rock. The problem has been technology continues to change and modernize. That threatens older industries like cable TV and their traditional cable TV and broadband as well. In fact, even telephone companies face a similar problem.
Providers face the choice of staying put or modernizing. Cable television has decided to do a little of both with mixed results.
Over the years they have added new services like broadband, VoIP telephone, wireless, streaming and more to their cable TV service. At the same time, they have used bundling as a strategy to hang onto market share for as long as possible.
So, they created what I call a sticky-bundle of services. The more services a customer bought, the larger the discount they got. Since it would cost users more to switch, many stayed put. The hope was it would slow market share loss. And it did, for a while, but the market share loss did not stop.
That’s why today, cable TV is in the troubled position it finds itself. They have a wired network leading to countless homes and businesses, nationwide. Unfortunately, this old network is for older technology.
Read more: Is there a solution for cable and broadband?
This is not unlike the problems faced by traditional telephone companies, which are also losing market share. Telephone companies are dealing with the same shift. However, they are changing their focus from one market to another and in my opinion doing a better job than the cable television industry.
Increasing competitive pressure is changing the cable television industry. All of a sudden, Comcast Xfinity is no longer king of the hill. We just learned they are now No. 2. Charter Spectrum CHTR is the new No. 1. While that sounds great for Charter Spectrum, it’s not at all good news. As all cable TV ships are sinking, Charter Spectrum is losing business less rapidly. But they are still losing.
Cable TV customer satisfaction remains very low
At the same time, prices keep rising for cable TV and customer satisfaction remains low.
More bad news. In recent weeks, we have learned how smaller cable TV providers are in dire straits. They have lost most of their cable TV market share. They are down to roughly 10% or even less. That’s why they announced they are exiting the cable TV space.
Larger cable TV providers are also losing market share. My understanding is many are down to roughly 30% – 40% market share. This industry wide drop is not what investors and workers want to hear about.
Cable TV customers won’t like it, but they will have to change the way they get and use pay TV services.
CEO Brian Roberts and the entire Comcast Xfinity CMCSA executive team has fortunately done something about this growing and ongoing problem. Over the years they acquired NBCUniversal and assorted other properties. That means they are no longer reliant on just cable TV.
That’s not the case with their competitors, who most of which are pretty much all-in on cable TV, VoIP telephone, broadband and wireless service. The problem is these are yesterday’s services. Cable TV companies need to be selling tomorrows services.
That is why the traditional cable television industry future does not look bright. Changes must be made. Changes other than slowing the decline. Changes other than offering a few new services from yesterday. Cable TV needs to look forward, not backward.
Read more: Half of cable users have already cut the cord.
Cable TV needs to market new, forward-looking services like FWA
New competition in broadband is coming from many different directions. New providers of wire line broadband are one of them. Fixed Wireless Access or FWA is another growing threat.
Let me explain. FWA is a wireless broadband service. This is being offered by wireless carriers like AT&T Mobility , T-Mobile TMUS and Verizon Wireless VZ . There are many smaller competitors as well like US Cellular, C-Spire and countless others.
This is a new type of wireless broadband service which customers seem to like better. The customer satisfaction is higher than with traditional cable TV and broadband.
If you think about it, is there a reason cable TV competitors can’t do the same thing? FWA could help stop or slow the decline in market share. That seems like such an obvious solution to at least one of these problem areas. However, cable TV services are losing market share. I am afraid this is going away.
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