Thursday, June 2, 2011

Time Warner Cable Sees Broadband Only Opportunity

Yesterday's blog talked about the loss of the "all you can eat" broadband consumption model and cable's hope to retain it's triple play business. It also touched upon new competition that could face cable in a broadband only model. And of course, once you hit send, there is an article about Lightsquared, Inc. hoping for approval to compete in this space. But where some cable companies may be fearful of a broadband only world, another seems to embrace it.

"Time Warner Cable Inc. Chief Executive Glenn Britt said Wednesday his company has an opportunity to win more broadband-only customers as broadband replaces TV as the cable industry's anchor product." Changing times require changing strategies and Time Warner Cable seems to get it. Like Netflix changing its model from DVD rental to streaming, TWC is taking its first steps to grow its broadband business as it's linear cable model is slowly declining. And like Netflix, TWC recognizes that this change takes time, but must be embraced. Otherwise, they begin to look like Blockbuster, late to the game, and hard to remain in play.

With Lightsquared planned release early next year, TWC and other cable companies need to redefine their business strategy to remain ahead of other competitive entrants. Knowing that these companies may try to underprice cable companies to encourage cord cutting, cable must strategize and market its competitive differences and push a pricing model that retains and grows subscribers. A usage pricing model is not the answer; TWC is trying hard to retain with its TV Essentials cable package as a way to keep consumers connected. Cablevision has used Optimum Rewards as a strategy to retain its best, triple play customers.

Cable Companies must understand that broadband access has become an important service for the consumer, even ahead of phone and cable. Strategies must continue to evolve to find the next consumer need. Yesterday was triple play, but not anymore. It is a broadband world and cable needs to build mobile accessibility to it and rethink its pricing models. Or like Blockbuster, this may be the start of their decline.