Tuesday, April 29, 2008

Cable loses subscribers, satellite gains in Q1

While cable is attacking the phone's landline business, the telcos have been attacking cable's video and hi speed business. And while the telcos have lost phone revenues, it is not because of cable, but because of changing technological trends toward mobile communication. And with a recessionary economy, people need their cell phones, and can reduce their expenses by dropping the landline.

So does that make cable's strategy of going after the triple play business less successful? Cable has a real opportunity to take away a big portion of phone business in the home, but even more importantly, in the business sector. Providing phone and hi speed data services to businesses can become a lucrative opportunity for cable and should not be discounted when lookin at their revenue numbers.

Cable subscribers and cable revenue will decline; competition does that. But cable can still show huge revenue growth by entering into these other businesses that the phone company has had huge control over. Cable's business has an upside too.

On the consumer front, modem speed and fast connection are important marketing benefits to pursue; more homes have a hi speed line than a HD set. Consumers accept the modem because it hides behind the computer and does not interfere with the pc's ability to navigate. A cable box, on the other hand, takes controls away from the tv set. Most consumers prefer not to have a box; they are not comfortable with it and tend to limit the number of sets that they put a box on. The marketing benefit is to work closer with these manufacturers to improve their ergonomic value. Hey Apple mad an mp3 player a must have with the ipod. Until then, homes will do their best to work around the box or limit their numbers.