Tuesday, April 22, 2008

Competition for your Digital Connection

So who should you connect with; who is your provider for phone, cable, hi speed? Are you working with one provider and taking the triple play discount or are you picking a little from each? Interestingly, the decision is being made by what is most important for you and your household based on a number of factors. And cable, telco, and satellite are doing their best to prove that they have the competitive edge.

Cable's edge today is the triple play, offering a discount my purchasing all three platforms from one provider. In addition, cable touts its VOD choice and is starting to push that advantage with HD VOD as well. That technological edge for them is also leading them to more advanced services like start over and look back, supporting the benefit of "what you want, when you want it". Lastly, cable brings strong local content, particularly with news channels, like NY1 from Time Warner in NY and News12 on Long Island from Cablevision. Channels not accessible to consumers on their competitor's platform.

Satellite continues to push HD linear channels as their strength. Some consumers even believe they get a better HD signal from satellite than cable. For Direct TV, it pushes the content edge with the NFL package, offering out of market games to the true NFL fan. But Direct TV may kill this golden goose as they charge more to the package to upgrade it to an HD feed of these games. Satellite sees the risk from VOD and has now found a way to enter this business with a competitive product. Whether the consumer is satisfied with its method for delivering or technology can improve the ability for satellite to become 2 way remains to be seen. It also affects their way to offer hi speed and has caused them to partner with telcos to offer a triple play like package.

Telco was feeling the heat from the loss of hard line phone and needed to enter the cable business to keep customers from switching. As cable becomes more adept at marketing to the commercial telecom business, telco revenues will be even more hurt. Telco has entered the cable and hi speed game with fiber to the home and tout a higher download and upload stream at a lower price. Consumers that need high bandwidths, whether for business or personal reasons, see this as a competitive reason to become telco triple play customers. With the exception of local content, telcos are offering similar VOD and HD choice as cable and seem to also play the price advantage in their marketing campaigns.

So content choice (local, sports, HD, VOD), speed, and price seem to be the three major factors determining which service is chosen by customers. And like any business that involves customer relationships, exceptional service matters, too. Because while it may not be easy to switch providers, bad service can become the impetus to make that change.