Thursday, October 8, 2009

Cable's Loss Is Telco's Gain

I came across this website through an associate and when I scrolled down saw this chart of basic sub growth from Q3 2008 through Q2 2009. It indicates a serious problem for the cable operator:

Over the four quarters cable basic subscription has dropped, while the telcos, AT&T and Verizon, and Direct TV has shown growth. In fact, telco and dish basic growth is greater than cable's loss, indicating that there are still homes that are new to cable television.

Of the cable operators, only Insight has for the most part gained subscribers for three of the four quarters. Comcast has consistently had the most loss for the same period. While cable may be selling more services to their current customers, data and telephone - the triple play, it is finding itself selling to a smaller and smaller universe.

In summary, the incumbent has a serious challenger in the telcos and better do more to reverse this trend or will find itself selling less of its other products and losing serious revenue. Today, AT&T and Verizon's share of the cable universe remains small, but the indication is that they are growing fast. Per the JD Power report, telcos and satellite are beating cable for customer satisfaction. The trend should be disturbing to cable and they need to act FAST or risk losing their lead in the next few years. Customers are dissatisfied with the service, choice, quality, and price. Cable is zero for four and has built for itself a bad reputation in the marketplace. It is time to re-evaluate and change internally, then market that new approach to win back customers. Otherwise, the leak in the dam will only continue to grow!