Once again, the cable television industry is struggling through another episode of cord cutting. This time, cable TV companies are not only losing pay TV customers, but now they are also starting to lose Internet customers as well. So, what is the next strategy to save the cable TV industry?
The cable television industry had a similar crisis several years ago. They didn’t solve that problem, but they did slow it down by creating the sticky bundle. Now this crisis is roaring back again, and in fact, expanding.
Several years ago, Cable TV was able to dodge the bullet of customer loss for lower cost pay TV options. The problem was this was not a long-term fix. Instead, it was a short-term block. All it did was slow the crisis down.
That solution was what I call, the sticky bundle of services. They offered cable TV, Internet, VoIP telephone and wireless, put them in a bundle of services and offered discounts. The more services a customer bought, the larger the discount. And that would keep the customer base intact.
That strategy worked. Until now.
Xfinity Mobile, Spectrum Mobile, Optimum need next sticky bundle
Today, the threat is back, and it is bigger than ever with two parts of that sticky bundle: cable TV and the Internet.
And today, I do not see a life preserver reaching out to them. Not yet anyway. So, what will cable TV do to create the next sticky bundle in order to save themselves?
It’s not just a problem for Comcast Xfinity and Charter Spectrum, which are the two largest cable TV providers. It is the entire cable television industry under the gun. That means smaller competitors like Altice USA, Cox Communications, Dish Network, DirecTV and more.
In recent years, streaming services have been growing and taking market share away from traditional cable TV. Think services like YouTubeTV, Hulu, Sling, Filo, FubuTV, Prime Video, Peacock, Paramount, Max, Disney+, Discovery+ and others.
Streaming services, sticky bundle and broadband helped cable TV space
As you know, the traditional cable TV industry is under enormous competitive pressure for their traditional pay TV services.
One reason is the weak economy. Customers are searching for ways to cut costs and save money. As long as there are options, this trend will continue.
Another reason is technologies change. Just like we are using wireless phones and not landline phones any longer, the traditional telephone network and services are losing market share and have been for two decades already.
Still another reason is customers like something new.
What is next solution to cable TV problem?
To fight the last threat, first the original sticky bundle worked. It pooled together cable TV, Internet, mobile phones, VoIP telephone and more. Customers got a discount for bundling these services together.
This slowed the loss, which gave industry leaders time to think through a new growth strategy going forward.
In recent years they also followed the trend and moved into broadband then streaming services.
While this worked for a while, it did not solve the bigger problem.
Sticky bundles and streaming services are not the long-term solution. Sure, they can be one slice of the pizza pie, but they will not solve the larger industry problems.
Cable TV shift to broadband is no longer working
Today, the move to broadband, streaming services and the sticky bundle are no longer working.
While this was successful for a while, it turned out to be a corner the cable TV industry painted themselves into.
Today, that threat is expanding.
Cable TV providers are important companies. They can change. They can find new areas of growth. Why haven’t they?
In the past, some companies were able to change focus on new products and services and make the leap. Others could not.
Think about the local phone business. Until the end of the 1990’s, the Baby Bells sold local and long-distance phone service. They tried other areas like cable TV, wireless and Internet with mixed results.
Verizon and AT&T went with AOL, Yahoo, DirecTV and WarnerMedia
Today, Verizon and AT&T are no longer known for their traditional phone service. Instead, they are the largest wireless providers along with T-Mobile. Plus, they offer other services like data networks for consumers and business customers.
Lately, even Verizon and AT&T are struggling and trying to accelerate growth. That’s why they made the mistake of trying other industries like AOL, Yahoo, DirecTV and WarnerMedia, which all failed.
That’s a similar challenge faced by the cable TV industry. If they have not developed the next growth strategy, then they wasted the last several years.
Now the monster threat is roaring back to life, and it is growing. Now, it’s not just cable TV, which is at risk, but their newest success story, broadband and streaming services as well.
So, let’s keep our eyes on the next steps the cable TV industry will take. Now is the time for them to pull another rabbit out of the hat. Let’s hope they get it right with a long-term solution this time.
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