The Cable Industry Thinks Cord Cutting's A Fad That Will End Once Millennials Procreate

from the the-lies-we-tell-ourselves dept

One narrative that broadcast and cable industry execs use to comfort themselves late at night while sipping bourbon is that cord cutting is the realm of the foolish youngster, and that as these folks age they'll suddenly see the wisdom in paying an arm and a leg for traditional cable. Nielsen, the TV ratings company that goes out of its way to tell the cable industry what it wants to hear, has been pushing this narrative hard lately; arguing that as the 18-to-34 demographic begins having children, the idea of giving Comcast $150 a month for huge bundles of awful channels is going to suddenly, somehow become appealing:

"We think behaviors could change once the so-called millennials start having families,” said Glenn B. Enoch, senior vice president for audience insights at Nielsen. New parents’ desire for better programming for their children will help drive them to cable, media executives have predicted.

Nielsen's confidence appears based entirely on the fact that Millennials with kids are slightly more likely to subscribe to cable than their childless counterparts, for now:

About 80 percent of millennials with their own homes who have started families subscribe to cable, and an additional 14 percent get television with an antenna, according to Nielsen. Only 6 percent have just broadband connected to a television set. Among childless millennials who live in their own homes, about 75 percent subscribe to cable television, while 13 percent live in so-called broadband-only homes.

Of course, that doesn't mean much. When it comes to the ratings hit being seen by traditional cable channels, children's programming has led the charge, with parents being much happier with the flexibility of time-shifted viewing experiences like Netflix. Meanwhile, 2015 was really only the first year that skinny bundle streaming video services started to take off (Sling TV, Sony's Playstation Vue), and the rise of affordable streaming options is only going to improve as broadcasters release their iron-like grip on licensing rights.

It's also worth reminding readers that Nielsen is the same company that just a few years ago declared cord cutting to be "purely fiction," only recently realizing that maybe it would be a good idea to start tracking these users' viewing behaviors.

One major thing Nielsen's ignoring? The rise of the "cord never," or the customer who doesn't have cable and has absolutely no interest in getting it. A new study by Forrester Research makes the exact opposite claim Nielsen is trying to sell, predicting that by 2025, 50% of consumers under 35 won't pay for traditional cable. The survey of 32,000 U.S. adults found that 76% subscribe to cable. Of the 24% who don't, 6% are cord cutters. 18% however are cord nevers, which the firm declares "the next stage of evolution in TV viewing":

"Rather than inherit TV viewing expectations from a prior era and then consciously reject them, as cord cutters have done, these cord-never viewers have simply bypassed prior assumptions, exhibiting nearly the exact set of behaviors that cord cutters have pieced together for themselves over the past decade of viewing," wrote Forrester analyst James McQuivey."

In other words, there's a huge contingent of young consumers for whom "normal" is not paying an arm and a leg for cable. Why, exactly, would these users, used to the flexibility and lower costs of streaming video (or piracy, or YouTube "let's play" videos) suddenly, inexplicably decide that they want to throw money at a legacy cable industry that refuses to compete on price? Sure, older consumers are more likely to pay for cable now because that's all they know, but as streaming services get more established older audiences too are leaving the traditional cable wheelhouse.

So while it may upset the cable industry (and the folks that make their lives on the back of the cable industry) to hear it, no -- the trend of dropping ratings, dwindling subscriber losses and fierce new competition from Internet video is not something that's going to be magically fixed by waiting for Millennials to screw.

Filed Under: cable, cord cutting, millennials, wishful thinking

Cable Company Totally Unsure What Neighborhoods It Serves, Wants $117,000 For Broadband Service

from the bungled-and-the-botched dept

Here's a tip if you're looking to move or building a new house: get your ISP to write you a letter confirming that they service your new address. While you're at it, get three copies of it from three different executives, have it notarized, and force the ISP to swear a blood oath, because even then you may find yourself without service at your new address. As we've noted a few times, users often assume ISPs actually know what neighborhoods they service, only to later have a Kafka-esque introduction to the U.S. broadband industry's blistering incompetence and dismal customer service.

The latest example comes via a Wisconsin resident who planned to build a new home on a lot both Frontier Communications and Charter Communcations said they were able to service. To be sure, the user double and triple-checked with Charter before beginning the build process:

"Despite not being in a densely populated area, Marshall said the lot was advertised as "cable-ready." Before committing to the purchase, Marshall said, “I looked on Charter’s website, and I typed in the address of the lot, and it said, ‘yep, we can service you.’" Just to make sure, Marshall said he looked up the addresses of neighboring homes and got the same answer. Just to make extra sure, Marshall said he called Charter “and gave them the address, and they said, ‘yup we can service that lot.’" Construction on the house began in November 2014 and finished in June."

The user did everything right short of getting the promise in writing. And guess what? Charter wasn't able to service that lot. Worse, after admitting error about its own network coverage, the cable operator informed the user it would cost him a whopping $117,000 to provide service:

""Once my house was built, I called [Charter] to set up service, and that’s when they told me they made a mistake. I was too far away from their network," Marshall said. In June, a Charter construction coordinator told him he’d have to pay $117,000 to cover all labor, materials, and permitting for a network extension to serve the home. Marshall would have to pay the entire $117,000 up front before Charter would begin construction, and the price would not go down even if other homeowners signed up for service.

The user got the same runaround from Frontier Communications, who originally promised it was able to deliver 24 Mbps to that address, only to later admit it could only provide around 3 Mbps -- at best (and which will likely be force-bundled with an expensive legacy voice landline the user won't want). The kicker is that both of these companies have lobbied to erect state barriers to community broadband, which is often an organic response to this kind of dismal coverage and customer service. So again, this is a market where you've got lumbering ISPs with absolutely no incentive to expand or improve service, literally writing state law ensuring that nobody can do anything about it.

Fortunately the FCC has finally started to attack these state laws so communities can improve their own broadband in cases of market failure, but it's a contentious fight with states busy pretending that it's their god-given right to erect duopoly-protectionist laws written by AT&T and friends. Meanwhile, our national broadband map, which cost $300 million to build, often doesn't help matters. Plug your name into the government mapping apparatus, and it will often not only hallucinate broadband providers in your area, but it will utterly fabricate available speeds. That's because it relies largely on the word of ISPs eager to pretend that the U.S. broadband industry is awash in competition, with much of the data never fact checked.

And good news, everyone! Charter Communications is on the cusp of buying both Time Warner Cable and Bright House Networks (in a $79 billion merger), and Frontier is busy gobbling up AT&T and Verizon's unwanted DSL territories. In other words, there's a pretty good chance this exact brand of incompetence could be coming to your neighborhood very soon.

So if you're moving to a new area and an ISP claims they offer broadband, get it in writing. Wander the neighborhood asking neighbors what services they can get. Get sixteen company executives on tape insisting they provide service. Because most U.S. ISPs not only don't know the physical footprint of their network, it's abundantly clear they have absolutely no interest in accurate data, customer service, or being accountable for false promises. When you're the only game in town, you quite frankly don't have to give a damn. And when you're the one buying and writing state telecom law, it's remarkably easy to keep it that way.

Filed Under: broadband, cable, isp, wisconsin
Companies: charter communications, frontier communications

The Cable Industry Is Fighting Tooth And Nail To Prevent Cable Set Top Box Competition

from the protectin'-innovation-through-obstinance dept

For years now regulators have tried fruitlessly to bring a little more competition to the cable set top box market. While CableCARD was supposed to be a revolution on this front, regulatory enforcement was messy and inconsistent, and to protect set top box rental revenues and overall market control, cable companies rarely advertised the technology and made installations frequently nightmarish and expensive. When lackluster CableCARD stats then emerged annually, the cable industry just shrugged and apathetically declared that gosh -- nobody really wanted choice anyway.

Senators Ed Markey and Richard Blumenthal recently collected data from ten cable companies and found that things haven't really improved when it comes to set top box competition. Their data found that 99% of cable customers still rent a cable box, and pay $231 in fees annually for hardware that's usually not even worth a single year's payments. As a result, the cable industry generates $19.5 billion per year in rental fees, and has every incentive to keep things as they are.

Last fall, Congress passed the Satellite Television Extension Act Reauthorization (STELAR), which effectively killed the CableCARD and the FCC's sloppy attempt to crack open the set top market. However, STELAR's passage included the creation of the the Downloadable Security Technology Advisory Committee (DSTAC), tasked with advising the FCC on how to move forward on a CableCARD replacement that actually works. That's no small feat given the cable industry desperately wants to maintain the status quo, and the copyright brigades want hardware to be as locked and crippled as possible.

Among the DSTAC proposals released last week (pdf) is the idea of a "virtual headend," where network security functionality is performed in the cloud, leaving the end user device flexible for an array of hardware and software solutions. It's an evolution of the "Allvid" proposal the FCC considered in 2010, intended to create a single, unified standard for a set top gateway that's open to all forms of video competition, software and hardware alike.

Not too surprisingly this idea has the support of companies like Google, Apple, Sony and Microsoft, but has faced stiff opposition from the cable industry. With reports suggesting DSTAC will be pushing such an open platform (even if more flexible than the original Allvid proposal), the cable industry's chief lobbying apparatus (the NCTA) is of course once again trotting out the safety, privacy and security bogeyman:

"Regrettably, the report veers off course by including a controversial proposal to place a burdensome technology mandate on MVPDs known as AllVid. This approach could jeopardize consumer protections including privacy, emergency alerts, parental controls, and inhibit innovation by allowing the government to dictate the way video content is delivered to consumers. Fortunately, the report reflects substantial opposition to the idea of a new, government-imposed technology mandate and extensively describes the proposal's shortcomings."

Yes, and we wouldn't want to "inhibit innovation," would we? Opening up the locked-down cable set top box not only would open the door to greater set top hardware competition, but it would ultimately threaten the cable industry's stranglehold over cable itself. As such, it's highly unlikely that any proposal worth its salt will see NCTA approval. It's also probably unsurprising that Allvid has the support of consumer advocates like Public Knowledge and the New York Times editorial board, which this week tried to soft sell the idea to the cable industry at the bottom of an editorial on the subject:

"Cable and satellite companies will surely resist change or try to water down the new F.C.C. regulations. After all, they stand to lose billions in rental fees. But it is in their long-term interest to give consumers more choices. A growing number of Americans are giving up cable-TV because it costs too much. Consumers might be more inclined to pay for cable if the industry stopped trying to nickel-and-dime them."

Except it's not really in their long-term interest to give consumers more choices. Open set top gateways and open, competing platforms would only further usher in increased Internet video options, incurring a mass realization that people pay the cable industry far too much, for far too little. As such, expect the cable industry to scratch, piss and moan until it has ensured that whatever standard emerges from the FCC committee is a scarred and bastardized shadow of the original intent. And should this shadow actually survive the lobbying gauntlet and see real-world adoption, the cable industry will surely work tirelessly to ensure the same level of dysfunction consumers enjoyed with the CableCARD.

On the bright side: none of this really matters longer term. Neither incompetent regulators nor terrified legacy giants can stop the Internet video revolution from threatening traditional cable television. And as traditional cable's power wanes, its all-too-comfortable walled-garden authority over the set top box market becomes utterly irrelevant. As such, the cable industry needs to stop focusing on swimming upstream, and start battening down the hatches ahead of what's going to be a particularly nasty storm.

Filed Under: cable, cablecard, competition, fcc, set top box, stelar, tv

Cable Industry Still Proudly Thinks Cord Cutting Is A Media-Manufactured Crisis

from the denial-is-not-just-a-river-in-Egypt dept

A few years ago, if you asked cable and broadcast executives if cord cutting was real, most of them would proudly declare that it was a complete and total phantom (like Yeti). The few that could admit to the trend would usually try to argue that the only people engaged in this kind of behavior were losers not worthy of their consideration when contemplating their business models. Of course data has emerged since suggesting that not only is cord cutting very real (albeit slow), the people doing it are affluent, educated, and right in cable's key future target demographic.

These days, most cable and broadcast executives, after slowly hemorrhaging basic cable subscribers for several years and watching broadcast TV ratings drop through the floor, will at least admit that cord cutting is real. But there's still a strong contingent among them that desperately wants to believe that cord cutting is a media-manufactured phenomenon and that their beautiful legacy cash cow will somehow live forever. The latest case in point comes via a Fortune article that explains "Why Cord Cutting Is a Myth" without actually doing anything of the sort:

"The way content is consumed is changing,” said Amy Banse, managing director of Comcast Ventures. “We’re all aware of that. But I personally believe, and also by looking at our own statistics, that the volume of press around cord cutting doesn’t quite match reality."

Again though, Banse doesn't offer any data to support the argument that cord cutting is a mass media hallucination. Factoring cable's failure to scale with new housing growth as the housing market recovered, telecom analyst Craig Moffett (who used to deny cord cutting) notes the pay TV business lost 1.4 million subscribers in the last year. The pay TV industry saw its first net subscriber loss during the first quarter of this year, and the industry is contracting at a 0.5% annual rate. This is before you factor in that many people aren't "cutting the cord" -- they're not signing up for traditional cable in the first place. And all of this is hitting cable and broadcast ratings hard. Comcast's recent earnings say the company lost 69,000 basic video subscribers last quarter and 3 million over the last six years.

These are measurable metrics -- some small, some not so small. All important, and none imagined.

Still, to hear the cable industry tell it, cord cutting is "over-reported":

"George Kliavkoff, president of Hearst Ventures, agreed, and said the topic is low-hanging fruit for the media: “Cord-cutting is a great ‘story,’” he said. “But I think it’s over-reported.” What’s more likely to gain sizable traction, he said, is cord “shaving,” where consumers simply move away from all-encompassing multichannel packages. “A la carte purchasing of channels—and not taking most of them—is a far more interesting area,” he said.

The second half of that argument could certainly be true. "Cord shaving" or "cord cheating" is also occurring at an increased rate as cable customers socked with bi-annual rate hikes look for any opportunity to cut their monthly bill. Eventually, these users will also likely be turning their gaze toward redundant cable voice services, forcing cable operators to replace that revenue in new and "creative" ways. This is all part of one conversation. And while yes, some media outlets do overhype cord cutting without nuance or context (as happens with all things), how the media explains what's happening is a distraction. The focus should be on how the cable and broadband industry is failing to adapt to internet video through its refusal to offer truly evolutionary products and pricing.

Some of this is semantics. Some cable execs simply don't like to call it "cord cutting," given there's still a cord -- it just happens to be broadband only. But whatever you call it, the answer to all of these problems has a single unified answer. With 2015's rise in new internet video options, cable's going to have to do the one thing it has spent a generation refusing to do: compete on price.

Filed Under: broadband, cable, cord cutting, denial, tv
Companies: comcast

Comcast Lobbyist Admits It Helped Create Netflix By Refusing To Compete On Price

from the own-worst-enemy dept

Top Comcast Lobbyist (sorry, Chief Diversity Officer) David Cohen was a one-man disinformation firestorm during Comcast's doomed acquisition of Time Warner Cable. Cohen has a nasty habit of spearheading greasy practices -- like paying minority groups to parrot bad public policy positions to create the illusion of diverse support -- then pretending to be outraged when these connections were highlighted. Cohen also amusingly declared that those opposed to the company's merger ambitions were ignorant and unreasonable, without a single supportable fact to be shared among them.

That's why it was pretty interesting to watch such a master of spin candidly acknowledge that Comcast has only itself to blame for Netflix's rise as an Internet video powerhouse. Calling Netflix the company's "ultimate frenemy" at a recent telecom conference, Cohen admitted that streaming services like Netflix were a self-inflicted gunshot wound, created in large part because the cable ecosystem charges way too much money for its services:

"While Cohen sees Netflix as a complement to Comcast’s cable offering, he acknowledges that streaming services, especially those that offer slimmer video packages like Sling TV and Sony PlayStation Vue, could potentially be more attractive to price-conscious consumers. "Part of this is a self-inflicted wound," Cohen said. “We have made video too expensive."

A cable or broadcast executive admitting they've refused to compete on price is a rare animal indeed, and even more rare from a legendary obfuscationist like Cohen. Normally, Comcast has downplayed their slow quarterly hemorrhaging of video subscribers, while Netflix, in contrast, added 3.3 million subscribers last quarter alone. Like most cable execs, the folks at Comcast are so used to a pampered duopoly, they see price competition as a vile alien abomination, justified in part by the millions of consumers that continue to pay an arm and a leg for bloated, over-priced lineups of unwatched channels.

These executives also honestly believe their inflexible legacy empires are able to out-innovate price competition by releasing abysmal "me too" products. Products like Comcast's recently launched and widely-ridiculed "Stream" platform, which is laden with so many caveats as to make it largely irrelevant in full competitive context.

Of course Cohen also got to the modern meat of the issue, reminding attendees at one point that no matter how large Netflix gets, it still needs to come through Comcast to get to its customers:

"Cohen added while some fear that more Netflix customers means less cable customers, he reminded the audience that reliable broadband is a crucial element of the streaming service. “Remember, you can’t get Netflix without broadband service,” Cohen said. “Those are 3 million customers of our broadband service."

And that's the rub. At the end of the day, Comcast still intends to grab its pound of flesh one way or the other, whether that's by forcing Netflix to pay direct interconnection fees, or by slowly expanding the company's usage cap and overage fee trials and hoping nobody notices. Either way, Comcast will continue to do absolutely everything in its power to avoid having to compete on price for as long as humanly possible. But as they say, admitting you have a problem is the first step to recovery.

Filed Under: cable, competition, david cohen, price, streaming, tv
Companies: comcast, netflix

Cord Cutting Is About To Punch ESPN Squarely In The Face

from the dying-cash-cows dept

If there's a primary reason for ridiculously-high cable TV prices, it's sports content generally, and ESPN specifically. On one hand, sports programming is one of the biggest reasons that people continue to pay for traditional TV. But with the slow but steady rise in cord cutting and an increase in so-called "skinny bundle" streaming services, it's pretty clear that the "worldwide leader in sports" is starting to get a little bit nervous. Cord cutting has hit segments like kids broadcasting harder than other areas, but it's increasingly clear the death of the traditional cable cash cow is headed in ESPN's direction at a pretty reasonable clip.

According to a recent Wall Street Journal report, the channel is tightening its belt after starting to feel the cord cutting (and more accurately, the cord trimming) pinch. ESPN has lost 7.2 million viewers in the last four years, and a little more than three million in the last year:

Since July 2011, ESPN’s reach into American homes has dropped 7.2%, from more than 100 million households—roughly the size of the total U.S. pay-TV market—to 92.9 million households, according to Nielsen data. Viewership of SportsCenter, its marquee and high-margin sports-news show, has sagged since September, due in part to the fact that younger consumers are increasingly finding sports news at their fingertips on smartphone apps.

There's a cable and broadcast industry narrative that consumers just can't live without sports, and the blathering talking heads on ESPN somehow get included in this argument. But a recent survey by DigitalSmiths suggested that only 35.7% of consumers would include ESPN in their cable lineup if they were able to pick and choose their channels (a la carte TV). In fact, the channel came in at 20th place in terms of the most desired channels among those surveyed. So according to SNL Kagan data, there are about 94.5 million homes each paying $6.41 per month ($7.5 billion annually) for a channel they're not really all that interested in.

That's pretty clearly not sustainable, and ESPN could be served by getting ahead of the curve and launching its own direct-to-consumer streaming service. But the Journal points out that the company's current contracts with pay TV providers state that if ESPN goes that route, the cable operators have the right to boot ESPN out of their core channel lineups:

If ESPN offers its channel as a direct-to-consumer streaming service, some pay-TV operators have the contractual right to boot ESPN out of their most widely-sold channel packages and sell it a la carte, according to people familiar with the matter. ESPN would have to charge about $30 a month per customer in an over-the-top offering to make the same money using that model, analysts say. But those distributors would have the right to undercut ESPN in their retail pricing, the people said.

And you might recall that ESPN sued Verizon when the company decided to pull ESPN out of the core channel lineup, arguing at the time that this was necessary to protect "innovation":

ESPN is at the forefront of embracing innovative ways to deliver high-quality content and value to consumers on multiple platforms, but that must be done in compliance with our agreements. We simply ask that Verizon abide by the terms of our contracts.

In other words, if ESPN actually decides to get out ahead of cord cutting and cord trimming by focusing on a direct-to-consumer effort, they'll open the door to more cord cutting and cord trimming, since they'll no longer be able to force people to pay an arm and a leg for a product many of them don't actually watch. Isn't the Internet video revolution kind of beautiful?

Filed Under: bundles, cable, cable tv, cord cutting, espn, internet, streaming

As Merger Mania Rises, Cable And Broadband Customer Satisfaction Worse Than Ever

from the bang-up-job dept

As Comcast pushed tirelessly to try and sell regulators on its doomed acquisition of Time Warner Cable, the company repeatedly stated it was making customer service a top priority, even going so far as to hire a new "customer experience" VP. But what became an almost comical series of horror stories in the media continually showed that simply wasn't the case. If you have a memory, you'll recall that companies like Comcast have been promising to make customer service a priority for the better part of the last decade, yet things somehow manage to actually get worse.

The American Customer Satisfaction Index (ACSI), for example, shows companies like Time Warner Cable and Comcast performing worse than ever. They're doing so badly with consumers, they're rated not only the worst in telecom, but the worst in any U.S. industry. The latest Consumer Reports ratings for pay TV and broadband ISPs back up this narrative, noting that mediocrity was a high bar for the industry in the latest survey findings:

"Only one of 39 Internet providers received a middling score for value, with the remainder failing to reach even that level of mediocrity. TV-service providers also took a beating, with 20 of the 24 companies earning our lowest scores for value; the rest managed to do just a little bit better. Bundles also weren’t deemed especially good deals, since only one of 20 bundled services got an average mark for value—the others all did worse."

Take a moment to let that sink in. In broadband, only one ISP managed to be seen as utterly mediocre in terms of offering a decent value. On the TV front, the vast, vast majority of companies scored as poorly as was technically possible. That's the kind of abysmal performance that can only be perfected after a generation's worth of effort. According to Consumer Reports, these ratings are a seven year low for the broadband and television industry.

On a positive note, the study did find that it still pays to haggle with your cable or broadband provider, assuming you live in a semi-competitive market:

"One other finding from the survey: It pays to negotiate. Among the 42 percent who said they tried to negotiate a better deal, 45 percent reported that the provider dropped the bundle price by up to $50 per month, 30 percent got a new promotional rate, and 26 percent received additional premium channels."

That only 42% of consumers even try to get a better deal is fairly pathetic. But as cord cutting's slow-trickle-statistics suggest, there are tens of millions of customers that hate nearly everything about cable, yet continue to pay an arm and a leg each month. There are a number of reasons for that: lack of competition, being downright lazy, loving sports, or being a Luddite. The horrible customer service itself has been caused by two things: companies merging and growing too quickly without spending the money necessary to scale their customer service operations, and the lack of competition ensuring things stay that way.

Enter Charter Communications, which is busy promising regulators that all of these problems will magically go away if they're only allowed to acquire Time Warner Cable and Bright House Networks in the industry's latest $60+ billion mega merger. Like beaten house pets, most loyal, older traditional cable customers aren't optimistic that things will change. But as the Consumer Reports survey suggests, with younger demographics veering toward internet video and such choices on the rise in 2015, the clock is ticking for America's love-hate relationship with the legacy pay TV industry.

Filed Under: broadband, cable, customer satisfaction, mergers
Companies: comcast, time warner cable

Cable Execs Refuse To Offer Better TV Bundle Options Because Consumers Already Enjoy All The 'Value' They Can Handle

from the head-in-sand dept

Consumers have been clamoring for better cable TV pricing and more flexible channel options for the better part of the last decade, and for most of that time the broadcast and cable industry has been willfully -- almost gleefully -- ignoring them under the mistaken belief that the cable TV cash cow will live forever. With 2015 giving rise to a number of more flexible Internet video options, the conversation has heated up once again, leading to a very small number of companies (like Verizon) experimenting with modestly more flexible channel bundle packages where costly sports programming is broken out into its own tier.

However, the majority of cable TV executives remain with their heads planted squarely in the sand. When pressed on whether it would try to offer more consumer-friendly "skinny" channel bundles in response to consumer-driven industry trends, Time Warner Cable execs informed analysts recently that it would just be too confusing:

"There’s a lot of attraction in the press about skinny packages," echoed Dinesh C. Jain, chief operating officer of Time Warner Cable. “I think a lot of the times, customers don’t want to get bogged down in a lot of choices to make on those kinds of things. There’s a lot of value in our triple-play packaging right now and it’s a simpler sale."

Yes, you wouldn't want to confuse the consumer by offering them something more competitive than you do now. And when calculating "value," surely Time Warner Cable is including its excellent customer service, ranked worse than any other U.S. company in any industry? Time Warner Cable has been paying lip service to more flexible options since 2010 or before, yet they never seem to materialize. That's in part thanks to broadcasters, whose programming rates continue to sail skyward utterly untethered from reason. But cable companies aren't faultless; they raise rates wherever and whenever they can as well, whether that's for DVR rentals, extra fees just to pay your bill in person, or sneaky below the line charges to covertly drive up the advertised rate.

At the cable industry's Internet & Television Expo last week, cable executives again proclaimed they didn't see the need for more flexible, cost-conscious cable lineups, because customers already get way more value than they can possibly handle:

"People have always had choice in what they buy in their subscription package,” declared Charter Communications CEO Tom Rutledge. "The vast majority of customers tend to take the larger bundle, and the reason is, it’s a damn good value,” said Time Warner Cable CEO Rob Marcus after allowing that “More flexibility is better."

In other words, there's no need to offer greater choice or value because we're already really incredible at doing that. Except data across the board suggests that they aren't.

A Reuters/Ipsos poll released concurrently with these execs' comments found that 77% of U.S. adults say they'd prefer a la carte cable programming, a shift the industry has fought off for years by arguing it would kill niche channels (something that's happening anyway) and raise rates (something that's happening anyway). But it's not just a la carte the cable industry has been resistant to; it's any shift toward more compelling programming tiers. That same poll also found that 54% of consumers would like to be able to buy a core cable bundle that doesn't include ESPN, and 47% don't want cable news networks.

The cable and broadcast industry could work together to get out ahead of Internet video, but they're absolutely terrified of offering any products that would cannibalize their traditional cable TV subscriber bases. They're comforted by the fact that so many subscribers continue to pay an arm and a leg for bloated, expensive cable bundles, and believe that the giant pay TV fortress they've built will survive indefinitely. So like so many legacy industries, instead of meaningful, pre-emptive adaptation, the cable sector stands in the middle of the highway with a glassy eyed stare, confident in its resilience against the eighteen wheeler that bears down upon it.

Filed Under: a la carte, bundles, cable, skinny bundles, tv
Companies: charter communications, comcast, time warner cable, verizon

Cable Industry Tries To Distance Itself From Decades Of Poor Service By Eliminating The Word 'Cable'

from the good-luck-with-that dept

Annoyance with the cable industry appears to have reached the tipping point, with consumers fed up with skyrocketing prices, inflexible programming options and some of the worst customer service in any U.S. industry. The cable industry's ingenious solution? Stop using the word cable. Last week, the cable industry held its annual trade conference, previously dubbed "The Cable Show." Trying to distance itself from the aging, negative associations with the word "cable," the industry has decided to rename the conference The Internet & Television Expo.

Former FCC boss turned top lobbyist Michael Powell "hates" the word cable and wanted to turn the page on the word's negative connotations:

"I hate the name," Michael Powell, president of NCTA, the cable industry’s trade group, said Tuesday. "It doesn’t fairly capture what they do."...This year’s trade show was renamed to "be more centered around its future as it's associated with the Internet," Powell said on stage at the conference. The term "cable company," he said, "has a proud history, but it needs to be retired."

Of course when your entire business revolves around using coaxial cable to deliver Internet and television service, deciding to drop the word in the hopes of forcing a brand refresh might be an uphill climb. Most attendees of the show couldn't remember the new name, and just wound up calling the conference by the old name for simplicity's sake:

"It's called Internet something something something, right?” said Chris Gagliano, who works at Anvato Inc., which provides online video software. "I don’t even know what it stands for." Most people preferred to call it the “cable show,” even if that’s not the name anymore. "I'll probably call it that forever," said Brian Hanrahan, a regional sales manager at Optelian, which helps build broadband networks. "Until everyone else starts calling it 'INTX,' I’m going to call it the cable show."

Clearly, it's going to take a lot more than a simple word change to erase memories of waiting days for the cable man or spending four hours trying to get an answer from Comcast's kafka-esque phone support system. Atrocious customer service certainly isn't the word "cable's" fault. It's thanks to a lack of competition and the resulting apathy, which by proxy results in skimping on subcontractor and support quality. Eliminating the word cable in the hopes of fixing this industry chain of dysfunction is kind of like trying to put out a forest fire by proudly proclaiming it's a walnut -- it's just not going to get to the root of the problem.

Filed Under: cable, cable show, internet and television expo, michael powell, rebranding, the cable show
Companies: ncta