Ongoing losses continue with cable TV, broadband to streaming and FWA
Traditional cable television and broadband services are continuing their slide. Is there is nothing the cable TV industry can seem do to stop the continued loss? This has been occurring for a decade or longer, and it does not seem to be slowing, nor does cable television have any new ways to reverse the trend. In fact, thanks to new tech like FWA and streaming, things seem to be accelerating. So, what is the answer to this growing problem?
As an Industry Analyst I have been following and writing about this problem times for longer than a decade. Let’s face it, cable TV is no longer in growth mode. It has crested and is now in decline. Unfortunately, broadband has been impacted as well and seems to be on the same path.
FWA broadband is eating market share from cable TV
FWA wireless is eating the broadband market share from cable TV companies. To make matters worse, next, new FWA customers, who buy broadband from their wireless carrier could also move their wireless service as well.
Especially if there is a discount for moving both. I believe the wireless industry will ultimately offer this “sticky bundle” approach.
That will be another blow to cable TV. And that will only intensivy the problem and intensity cable TV providers are facing.
What can cable television do to fight back and fire up growth?
So, let’s take a closer look at what the future holds for cable TV as an industry, for their investors, consumers and workers.
Over time, we have seen this problem continue as the monthly user cost for cable TV continue to rise. This ongoing price rise continues to chase users into the hands of competitors.
Investors don’t mind higher customer costs if it leads to higher profits. Investors do mind when these higher costs and increased competition reduces customer count and profitability.
The problem is obvious. Cable TV customers continue to complain about rising prices, as new competitors and new technology move in and win market share.
Cable TV continues to raise their broadband speeds. However, today most broadband is fast enough if the goal is also for the customer to reduce costs.
Yesterday, cable TV used to be simple and affordable
Let’s pull the camera back to see the longer-term problem.
In 1980, the cost of cable TV was roughly $10 or so per month. Compare that to $180 to $250 or even higher today. Back then we had dozens of channels to watch. Today, we have hundreds. Today we also have broadband. Something that did not exist in the 1980’s.
While that sounds great, how many channels do we really watch? The average consumer watches 10 – 20 different channels on a regular basis at most each month. They stop for a moment while they search, but they watch a few core channels they prefer.
The problem the cable TV industry has created is more channels and higher costs when the customer wants to pay less, not more.
There is no problem offering these massive bundles. However, there is little option for customers who want a smaller package.
That is another reason customers are leaving.
Cable TV industry created the problem they wrestle with today
Many customers I speak with today would prefer fewer channels if it meant lower costs.
In fact, if that were the cases, perhaps cable TV would not be struggling with losses. So, the ongoing march of the industry contributed to push-back from users creating this new and competitive industry.
And this may just have been created by the cable TV industry itself. The result is, since the cable television industry continues to raise prices, they keep fueling growth of their new competitors.
The history of the cable TV industry started as an industry of smaller, regional competitors, lower cost, fewer channels and analog service.
Over the years, M&A has changed everything. Today, we have fewer, yet larger national competitors. Today, we have digital service. Today, we have broadband and streaming services.
Today, the industry offers are wide variety of services like cable TV, streaming, broadband, VoIP telephone, wireless service and more.
History of cable TV brings them today’s problems
The problem is the prices continue to rise as well.
The reason the cable TV industry got into all these different segments is the writing was on the wall and they needed a way to slow down the rapid loss of market share.
They started to offer these new services, bundle them together, provide a discount for customers who buy more than one, and they hoped this would slow the loss.
You see, at some point during the past decade or so, Cable TV subscribers were being lost so quickly the industry had to come up with a new, growth sector for survival.
The cable TV “sticky-bundle” worked, for a while
That’s what broadband did for them… for a while anyway.
In recent years, while the industry offered cable television, streaming services, VoIP telephone and wireless, their primary service was broadband.
However, now new broadband competitors and wireless technology like FWA are winning market share from cable TV as well. There are many reasons, but one main reason is the customer cost is lower.
This is a big-red flag that has been waving for years. So, something needs to change to stop loss and accelerate growth and this needs to happen immediately.
Cable TV two primary services were cable television and broadband
As cable TV is drying up, streaming services from a large variety of competitors are growing.
Generally, the industry says it has lost roughly 50% market share. However, many smaller cable TV competitors are in even worse shape. They are down to roughly 10% market share.
These smaller companies are even starting their exit from the cable TV market. As red flags go, that is astonishing.
New pay TV competition is coming from streaming services over the Internet. Think the wide variety of services like Hulu, Disney+, Paramount, Peacock, AppleTV+ and so many more.
Streaming services like Hulu, Disney+, AppleTV+, Peacock and more
Broadband is threatened as well. There are many new providers of service using various technologies.
One of the new broadband technologies is wireless. It’s called Fixed Wireless Access. FWA is the technology wireless carriers use to offer wireless broadband.
That means companies like AT&T Mobility, T-Mobile and Verizon Wireless are the next wave of competitor to cable TV using FWA wireless technology.
FWA broadband from AT&T, T-Mobile, Verizon, US Cellular
That also means all wireless competitors can jump into the same space. These are companies like US Cellular, C-Spire and countless smaller firms.
Bottom line, cable TV industry can’t seem to stop continued loss of market share with television and broadband.
If that’s the case, why can’t cable TV offer wireless broadband using FWA technology? Could that be the saving grace they need to reverse the long-term loss?
Why can’t cable TV companies offer FWA wireless broadband?
One problem with that option is new FWA technology from new competitors is price much lower for the consumer. That would mean the cable TV industry would have to swap out a thick, juicy steak, with a smaller, hamburger. One won’t replace the other with the same results.
Bottom line, while both may work, FWA will not replace the lost income from cable TV and broadband.
The truth is, cable TV is an example of yesterday, while it needs to offer services of tomorrow. FWA is tomorrow. That’s the only way they can survive.
Cable TV as an industry is now older, huge and important. It is not going away overnight.
That being said, that’s what they thought with the buggy whip industry when the car was first invented. It only takes time.
Brian Roberts helped Comcast Xfinity by acquiring NBCUniversal
So, it’s up to cable TV to find new ways to survive.
Brian Roberts, CEO of Comcast Xfinity acquired what has become NBCUniversal. That gives them a hand in another industry. That was a good move for them.
What about Charter Spectrum, Altice, Cox and the dozens of others, nationwide?
As you can see, something needs to be done to save the cable TV industry. As time passes, and the losses continue, cable TV needs to come up with some fresh new ideas for long-term growth.
They have to do something. Their back is up against the wall. They simply have no choice. I want them both to survive and to thrive, but their future is up to them.
