Cable TV used sticky bundle over last decade to slow change
Cable television growth has crested and is now declining. Streaming TV is changing the way we get and pay for TV and entertainment. Cable TV broadband is also facing significant competition. Wireless carriers are offering broadband using FWA wireless technology. These threats are costing cable TV in lost market share. In fact, smaller cable TV companies are even starting to exit cable television altogether because their market share is dropping so low.
So, what does this shift mean for investors, customers and workers of old and new services and companies in the space? And what does weak performance mean for the future of the cable TV industry?
Will streaming service and FWA trigger Verizon growth wave?
Streaming TV services is a relatively new, competitive and even volatile sector. So is FWA wireless broadband. Changes in both sectors are having both negative and positive impact on the industry.
In this changing marketplace, Verizon has an idea which may be good for them but hurt cable TV even more.
There are many individual streaming television services replacing traditional cable TV and Verizon wants to be a leader in this new and changing streaming space.
Verizon wants to bundle and cut costs of streaming TV
You would think since cable TV is losing market share, the change and transformation would come from players in its industry.
Instead, it is coming from new competitors in this changing space.
Now, Verizon is adding a new twist. They think they will benefit the customer by both bundling streaming services and cutting the cost.
The sticky bundle worked for the cable TV industry over the past decade. It slowed down the change wave.
This Verizon move reminds me of the way cable TV slowed down change over the past decade to slow their market share loss.
MWC24 will show FWA and streaming services could be next growth wave
It worked. It slowed cable TV loss but did not stop it. That’s one of many reasons cable TV is in the position that its in today.
Verizon just started this idea several weeks ago. They have bundled both Netflix and Max and saved the customer roughly 40% over buying these streaming services separately.
I believe we may see more companies showing off this kind of new solution in a few weeks at MWC 24 in Barcelona.
As an industry analyst and commentator for several decades, I am often asked by the media and industry executives for comment on the new industry direction, and the changing winners and losers.
So, lets pull the camera back and get a long-term, historical perspective on the changing industry.
Understanding what has brought us to where we are today will help us understand the direction we are heading tomorrow.
Cable TV, broadband being replaced by streaming, FWA wireless internet
Today, cable TV providers are losing market share for both traditional cable television and broadband services. These are being replaced by new streaming TV and new FWA 5G wireless home broadband.
Plus, wireless broadband is being delivered from the wireless carriers like AT&T Mobility, T-Mobile, Verizon, US Cellular, C-Spire and others.
While this is a growth opportunity, it is also a real challenge.
However, while this is a threat to cable TV, it is also an option that could save it.
AT&T, T-Mobile, Verizon, US Cellular, C-Spire in FWA broadband
I have been writing about the decline of traditional cable TV over the past decade. Now, broadband is starting to suffer as well.
The current state of cable TV is they are seeing market share drop in these two areas. Some say the level is down to 30% or 40% for some larger providers and around 10% for smaller competitors.
Over the years I have had many conversations with senior executives of cable TV and telephone companies. They know about this threat. However, many do not realize where it is coming from.
Cable TV competitors are reaping what they sowed
Cable TV is suffering from a self-created problem. While the sticky bundle slowed down market share loss, it did not stop it. So, what is next move for the industry?
Do you realize the main service for cable TV companies is no longer cable TV. It hasn’t been for quite a while.
Today, the primary service for cable TV competitors is broadband.
At the same time, they still offer a variety of services like cable TV, streaming services, VoIP telephone and wireless. But their primary service is broadband.
Streaming competitors like Disney+, AppleTV+, Paramount+ and others
There are quite a few streaming services competitors today winning market share from traditional cable TV including Disney+, AppleTV+, Hulu, Amazon Prime Video, Paramount+, Discovery+, Netflix, Max and countless others.
The growing number of wireless broadband competitors are also winning market share from cable TV providers including with FWA home Internet. These are companies like AT&T, T-Mobile, Verizon and other wireless companies.
Plus, a third area of threat should be on your radar as well. Satellite services. Companies like SpaceX working with T-Mobile. Globalstar which operates the satellite SOS service for Apple iPhone. Starlink and others mean satellites will continue to grow. Today, there are more satellites surrounding the earth than ever before.
FWA home internet, streaming and satellite are changing industry
That means, new competition from streaming services, FWA and satellite services are changing the industry.
While this is good news for the new services and competitors, it is bad news for yesterday’s leaders.
In my opinion, if cable TV was smart, they would enter this space as well, and quick. This could be a real lifeline to the cable television industry.
The telephone companies see this. So should cable TV companies.
Cable TV created current problems by not taking good care of customers
The threat cable TV companies are facing are a self-created problem. The Internet allowed for the creation of IPTV. This lit the fuse.
This is the growth opportunity Verizon is trying to capture.
This is the same growth opportunity cable TV competitors should jump into before they lose more market share.
In my opinion, the problem cable TV is facing is self-created. They have become a victim of their own past behavior.
Cable TV facing a self-created problem is now losing market share
In years past, they had no competition. That meant they did not have to take care of their customers. And they didn’t.
Today, they face real competition. Today, they are treating the customer better. However, there is not emotional connection to the customer. Today customers are showing they are ready to move on.
Do you recall several years ago how the cable TV industry tried to win customers back again with advertising. They admitted to the poor way they treated the customer in the past. They asked the customer to forgive them and give them another chance.
Ignoring the customer didn’t hurt them back then because the customer had no place else to turn.
But today, things are different. Today, the average customer can easily cancel their cable TV service and go with one or more streaming services, and a different broadband service.
Cable TV competitors hurt themselves with customers
So, yesterday’s poor performance toward customer by cable TV providers looks like it has finally come home to roost.
There is an old saying, you reap what you sew. And based on what is happening today, I would say the cable TV companies are starting to reap what they sowed with their customers for decades.
The good news is it’s not too late to turn this ship around. They must adopt this new technology like competitors are. They must also strengthen their performance and take care of the customer.
I hope they do before it is too late.
As for Verizon and other competitors, things are definitely changing. Will they successfully create the next chapter in this streaming story? Will the sticky-bundle be successful once again? Will cable TV companies adopt the same solution? We’ll see.
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