https://www.excelacom.com/resources/blog/surviving-the-cable-apocalypse-ensuring-revenue-and-longevity-in-the-mobile-age-7/

Mar 24, 2015

Surviving the Cable Apocalypse: Ensuring Revenue and Longevity in the Mobile Age

By Rachna Jethwani

If we take a quick walk down memory lane, most of us will remember a time when there were only a handful of TV channels and shows, ads couldn't be skipped and the picture quality was notoriously grainy. Over the past couple of decades, television viewing experience has changed dramatically; there has been an explosion of channels, and today it is hard to imagine not having access to unlimited content that can be viewed anywhere, anytime on any device. These advances have been possible thanks in large measure to the investments made by the cable companies.

But now that new players have started entering the industry, we've reached a point where doomsayers are predicting that cable companies could soon become the allegorical dinosaurs. The companies that have shaped and ruled the industry for so long may find themselves unprepared for the changes brewing in the landscape.

Key Challenges for Cable Companies

Some of the key challenges being faced are:

  • Subscription Video On Demand (SVOD) Providers. Cable TV subscriptions are facing competition from the likes of Hulu, Netflix and Amazon Prime. Millennials appear much more inclined to opt for the lower cost services provided by the online SVODs.
  • Demand for A La Carte Content. Consumers are clamoring for the ability to pay for what they view instead of the traditional cable TV packages which don't provide the ability to select specific channels.
  • Unraveling of the Exclusive Relationship Between Content Providers and Cable Companies. HBO has started providing rights for some of its content to Amazon Prime, while ESPN has started providing direct consumer subscriptions – completely bypassing cable providers.
  • Increased Mobile Usage. More and more screen time is being spent in front of mobile devices versus televisions. According to the 2014 Nielsen's Total Audience Report, there has been a 112% increase in "broadband only" homes, or homes that only receive video via the internet, from 2013 to 2014. From the same report, there has also been a steady decrease in cable viewership with viewers watching 12 minutes less TV per day on average.
  • Declining TV Ad Revenue. With mobile and internet usage increasing and TV viewership on the steady decline, companies are slowly starting to switch their advertising platforms. While TV is still king in terms of ad revenue, digital advertising is expected generate more revenue than television advertising for the first time in 2017.
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Solutions for Cable Companies

The burning question cable companies face is this: how do you stay relevant in the instantaneous and individualized mobile world? At this pivotal time, it is critical that cable companies become nimble and take a multi-prong approach. This approach includes innovation in cable TV services, evolved processes and business models; expansion into new lines of business/diversification of revenue streams; and investment in Business Services.

Business Services as a Solution

I've been engaged in various projects at a Fortune 50 MSO, leading implementation and rollout of new products, processes and systems related to all of the above areas. Of these options, expansion into the commercial segment presents the largest scope for growth. The commercial segment consists of Small and Medium Businesses (SMB), Small Office/Home Office (SOHO) and larger Enterprises.

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Business services has already made a great impact on cable companies, with the cable industry reaching a record breaking $10 billion in business service revenue in 2014. Targeted market segments include education, healthcare, government and financial services – segments in which cable service providers have already found success.

Business services customers are a lucrative segment since:

  • The contracts are longer term
  • High SLA / high quality services demand increase an enterprise's willingness to invest in high-value services provided by established industry players
  • High barrier to entry for new players due to expensive network build outs

As cable companies move up-market, there are several considerations they need to prepare for since the demands of businesses are much more rigorous than the demands of residential customers. One key aspect is their network. For cable companies to meet and exceed business demands, their network must be able to support high SLAs, monitoring, and visibility into their network's performance.

With an optimal network ability in place, cable service providers must also have systems with the ability to support complex configurations. Examples include the ability to digitally monitor and manage network devices at specific customer locations, support for both dynamic and static provisioning of configuration files, and optimal speeds to avoid any customer interruption.

In addition to having a solid network and flexible systems, cable service providers also need efficient processes when expanding into business services. These processes must be able to support sales, service delivery and service assurance for complex products.

In order to properly implement these key backend factors, a proper workforce is a necessity. Cable service providing companies must invest in their employees by administering the proper training and resources to ensure their ability to support new products and upgraded networks, systems and processes.

New advancements and direction in media consumption is not necessarily a death sentence for cable companies. However, cable service providers will have to adapt and evolve or risk becoming extinct.

New advancements and direction in media consumption is not necessarily a death sentence for cable companies. However, cable service providers will have to adapt and evolve or risk becoming extinct. An investment in business services, coupled with an efficient framework and well equipped workforce, will be necessary to ensure revenue, optimal customer satisfaction, sustainability and longevity.

For more information on how Excelacom can help find and unleash opportunities for your business, email us at marketing@excelacom.com.

References

http://www.slideshare.net/zinnov/us-smb-market-landscape-it-opportunity

http://en.wikipedia.org/wiki/List_of_largest_companies_by_revenue

 
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0001RachnaBlog

Rachna
Jethwani

Rachna Jethwani was a Process Competency Group Manager at Excelacom. Ms. Jethwani guided her clients to success by delivering new products, platforms and processes to drive increased revenue and strategic growth. Her core competencies spanned new product introduction, program management, deployment management, process innovation and strategic definition.

More about Rachna

Innovation meets performance.