Cable industry: at a Cross-Roads

Expert Opinion December 17th, 2009

, Expert Opinion,

Diagram of Streaming Multicast
Image via Wikipedia

Cable providers are looking at a cross-roads with the current climate brought on by a new political landscape, a Democratic Congress, with an FCC mandated to change the future of broadband, and a public viewed skepticism of the Cable Industry.

This adds up to significant changes which might threaten the status-quo of annual rate increases, tiered program blocks, and set-top-box rentals that have plagued the industry with criticism in the past. So, how does the industry change those perceptions and move forward in a new competitive landscape?

With innovations and growth spurred by deregulation of the 1980’s Reagan era, the Cable Industry began a journey starting with wire-line build-outs spurred by terrestrial satellite programming. A phenomenal market emerged for content delivered over the pipelines, which leaped forward with the advent of fiber for better quality, bandwidth, and extended reach to new customers.

This model became so successful it began to come under scrutiny from a public, and then regulators, which perceived an industry with little competition, blocks of programming tied to rate increases, poor service from a lack of forethought, and high profits.

Fast-forward to today with broadband streaming video, alternatives to traditional linear TV, increased competition from DBS and a few wire-line providers; the industry is at a cross-roads. Where do we go from here to ensure the profit model which made us successful in the past?

But the industry has its up-side, with a commercial business market largely untapped and held by incumbent phone companies for decades; a new venue of Internet Broadband viewing by an increasingly impatient consumer for change in the status-quo, therefore TV Everywhere; a Set-Top-Box market that begs for universal service across many mediums; and a mandate by regulators to increase broadband penetrations.

The industry can, if strategically focused, take advantage of these changes in the market by embracing change, letting go of the past, and moving forward to the future. Its message should be one of new innovations, a willingness to compete under a new market structure, and a helping hand in achieving broadband proliferation. These are the cross-roads the industry must face. Their message should be communicated positively, succinctly, and often.

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