Ten Survival Strategies for Cable Operators

  • Posted on: 22 May 2012
  • By: Patrick Oliphant

For over 20 years, cable operators have enjoyed being the choice for television entertainment above satellite and analogue broadcasting. With the arrival of digital services such as connected TV and other on-demand services cable-TV for the first time face the challenge of remaining relevant and competitive. According to a group of analyst at Informa they have found ten things that cable operators can do to remain competitive.

Informa thinks that despite the added pressure of the current economic situation, which is predicted to go on for some time, the change in consumer behaviour and increasing competition from OTT services provider, many cable operators can change their fate.

Extensive research done by Informa across all spectrum of the cable business (network, TV, Mobility, broadband, operator strategy, connected devices and Wi-Fi ) shows that subscriber numbers in the US and Europe will decline in the next few years. However, they also found things that cable operators can do to succeed, remain relevant, popular and grow provided they focus on maximising new opportunities available.

The white paper is titled: Ten Strategies for Competing in the Connected Era, highlights ten points for cable operators, I have only list seven here:

Upgrade and Upsell: based on informa’s own data, global cable infrastructure has just reach 50% and they are predicting that it will reach almost 80% by 2016.  They see an upgrade to current analogue as a first step for those still using analogue. For established pay-TV operators informa does not see any need for them to panic over declining or stagnating subscribers but recommend that they up-sell more services to existing customers. These could be services that enhance the customer’s viewing experience such as HD, 3D, multiroom DVRs and bundling services.

Partner with ‘Over-the-top’ (OTT) providers: Informa is forecasting that over 380 million people will be watching online video via connected TV devices by 2015. In Western Europe, the number of these OTT-V viewers will overtake those of digital cable-TV viewers at the end of 2015. To deal with the threat of OTT, Informa believes cable operators can deal with it in two ways: compete with OTT or by specialising in providing video services or become platforms, aggregating content and services.

Informa believes those wanting to be the latter, then working with OTT providers and adding them to this platform is necessary. For those that want the former, then the answer is to compete head-on with OTT.

Look beyond killer content:  Informa believes pay-TV businesses who cannot pay the premium for establish content can still survive – as long as they have a smart content strategy in place and a flexible pricing strategy.

Invest in a Second-screen strategy: according to informa, consumers in the developed markets have easy access to internet whether through phone, tablet or laptop; they are always connected.  This is an opportunity said informa, for cable operators to tap into the growing number of TV viewers who are “second-screening”, rather than competes with, the activities now possible via companion devices.

Bundle Connected TV with Triple Play Package:  As a win win for cable operators and TV manufacturers, informa said, cable operators could adapt the model of mobile operators where they bundle connected TV with their pay-TV or Triple –play packages.  Cable operators could make the connected TV part of a triple-play bundle, with cost of the TV part of the package; this will increase the ARPU and tie the subscriber into a long-term contract, said Informa.  According to informa the bundle would allow the cable operator to create different levels of packages.

Concentrate on Kind of fast broadband: According to Informa, most broadband customers are happy with low-to-mid tier broadband speed provided the price is right.  Therefore, they [informa] think operators should concentrate on what they called “kind of fast” broadband, 40mbs and up speed.

Develop mobile centric strategy: The potential of mobile goes beyond the ability to offer quad play and cable operator should think about investing in a mobility strategy to take some of the content from the set-top box said informa. Such strategy allows operators to serve their customers even when they are out of their homes.