Friday, November 13, 2009

Cable Basic Subscribers Continue to Decline

Quarter after quarter, basic cable subscription continues to drop. While cable continues to sell more services to is customers, their core base is declining. And where are they headed? Well, with basic subs are leaving cable every quarter, telco and satellite basic subs are increasing.

Eventually, that declining base will limit who can be upsold; cable is losing its base and those are the folks that buy high speed and wireline services. Its time to start differentiating cable from its competitors; better converter boxes and top service. Otherwise, cable will keep bleeding subs and find itself losing revenue in as prices drop to match competitive pressures.

Blockbuster's loss widens in Q3

Blockbuster is certainly having its issues. With competition from cable's on demand platform, Netflix, Redbox, and other online sources, consumers feel less compelled to go to a big box store to rent movies. And so the financial news released from them should come at no surprise. "Blockbuster said today that its third-quarter loss widened from a year earlier, as the largest U.S. movie-rental chain closed stores, saw a 14% drop in same-store sales and conserved cash by cutting advertising costs in preparation to refinance debt." And while cost cutting can slow down the bleeding, the bigger issue will be how to get more consumers back into their stores to rent from them.

Among the ideas, kiosks similar to Redbox, that bring the movies to other retail outlets in an easier to touch strategy. Another is to emulate Netflix and its online approach to extend the value of the relationship with the consumer. All me too, follower strategies, that show little of Blockbusters leadership potential. Lastly, they will expand their inventory by renting and selling video games as well. Per the report, video games represents their next big opportunity.

So if I were Game Stop, it is time for a preemptive stop. Currently they offer used games in addition to new ones. How about expanding that model with rentals. Consumers already see Game Stop as the destination for video games; this new venture would add revenue to their coffers while taking more wind out of Blockbuster's sails (sales, too).