Monday, January 21, 2013

Can Cable Operators Grow Subscribers?

Today's New York Times article looks at the new marketing push by Time Warner Cable to win back customers.  And the question is, can it be done.  "The company says it will spend at least $50 million on broadcast, print, online and direct mail ads for the campaign, which it is calling 'The Better Guarantee.'” But will they and other cable operators be able to convince consumers to return to them after switching to competitors.  While opportunities to come back for broadband and phone service is possible, the high cost of a cable subscription may make that return difficult.  Can a better service guarantee help; unlikely, as price seems to be the real motivation for consumers to switch providers.

To date, basic subscribers have been leaving at a slow but steady rate. Cost savings are real motivation; but the time involved to switch back and to be at home for the service call may dissuade households from changing unless a real cost savings is offered.  Even with a 30 day money back guarantee, consumers have become wary, especially if they have felt being mistreated in the past.  "AT&T and two satellite providers, DirecTV and Dish Network, have also ranked above the industry average, while Time Warner Cable, Comcast and other cable providers have remained below the average."

Cable operators are feeling the bite from cord cutters so this marketing campaign is a necessity to try and reduce, if not turn around their quarterly cable sub losses.  While cable operators are still finding growth in broadband and phone subscribers, cable growth may prove elusive.  Households are already using broadband to find similar programming to replace their cable, from Aereo to Netflix to Roku.  Until costs for cable service can be significantly lowered, customers will continue to migrate to cheaper services, regardless of a guarantee pledge.

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