Tuesday, May 08, 2007

Telco-Cable Competition Benefits Consumers

The cable monopoly is dead. Long live cable!

One of the biggest shifts we'll see during the next five years in entertainment is an explosion in consumer choice in television/broadband entertainment that may be bigger than the arrival of cable services.

Between satellite, telecom and broadband entertainment companies, cable companies are in the crossfire of new services that will force them to lower prices and become more flexible in meeting peoples needs.

Comcast, Cox et al are being challenged by telecoms such as AT&T's U-verse that similarly will bundle TV, Internet and phone services. On the broadband side, startups such as Joost will deliver a broader variety of high quality video.

This will result in the unbundling of cable packages so that you won't have to pay $40 a month for the 100 channels that cable companies select. Consumers will be able to go ala carte in paying for only the channels they want. We'll also see much more variety in video-on-demand programming, as companies compete with the online counterparts of ABC, NBC, etc. by letting you watch show on your schedule. We'll also see a surge in vertical programming online and through TV as both sides look to satisfy the "long tail" of consumer demand.

Don't expect cable companies to disappear; just their power will be considerably diminished. ABC wasn't killed by HBO, it just lost a great deal of its captive audience. The consolidation of services should be seen as a good thing because it results in increased efficiency and hopefully more attractive pricing.

Posted By John Gartner at 12:45 PM
Permanent Link: Telco-Cable Competition Benefits Consumers | Comments (1)

(1) Comments on Telco-Cable Competition Benefits Consumers

Interesting idea...the cable industry is now advertising that it all but invented the idea of competition. How could a branding strategy be so far removed from reality, and not laughed off the air (or off the wires, or whatever)? For that matter, the telecoms pushing for 'cable competition' legislation aren't any better; all of these services rely on locking consumers into onerous, long-term deals that have putative punishment for leaving (multi-year contracts, investments in equipment). And, once won, these services generally treat consumers much as monopolies once did...so where's the 'choice' other than that one moment when consumers can choose to give up their subsequent freedom? I've written a bit about this branding challenge at DIM BULB, at http://dimbulb.typepad.com, if you'd like to check it out.

Comments by Jonathan Salem Baskin : Tuesday, September 04, 2007 at 08:03 AM

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