Why So Glum? Cord-Cutting Heralds the Birth of the New Cable

By Carl Davies, Convergys Corporation?

Hardly a month goes by without breathless reporting of the current state of cord-cutting in the cable industry. The trend is steady; basic subscriptions have been in decline since 2001, and the device- and demographics-driven challenge from OTT and connected TVs is not likely to abate. But at the risk of sounding dismissive, what’s the problem??

The cable doomsayers aren’t wrong about the facts in their field of vision. But they are so focused on mourning a declining model that they are missing a simultaneous and equally important birth: the new model of cable, focused on transmission-agnostic content and provision of the broadband that feeds the universe of content consumers.?

Yes, the future is different, but any way you slice it, it has the same industry at its core. Here’s what’s really happening:?

The pressure for change is coming from two very different directions. High-end cable customers aren’t satisfied with a single, immobile device more attuned to their televisions than their preferences. They want multiple connections for their multiple devices, content available via wireless connections, and customer-centric service that both facilitates social sharing and provides a superior experience. At the same time, lower-end customers are feeling the pinch of the worldwide economic downturn, just as technology has provided the means to stream entertainment at costs that undercut all-you-can-eat cable packages and allow them the freedom to pay for one episode or one movie at a time.??

Two audiences, but one thrust: choice and flexibility. From either perspective, the one-device, pay-for-all content delivery model isn’t going to cut it for much longer. But cable is neither fated to disappoint the upper tier, nor doomed by its “economic exposure to the bottom half.” Rather, it is fantastically positioned to empower both.

With broadband as its anchor, tomorrow’s cable will be free to meet consumer needs at all levels, backed by smart technology that maximizes both efficiency and flexibility. Smart BSS — the billing intelligence to handle service provision to multiple devices, a la carte content services, and broadband resource management — will allow cable to meet ever-increasing customer expectations while maintaining revenue, and continuing to evolve.??Flexible responsiveness is the key to satisfaction and growth, giving cable customers on-demand, on-device value. And it also provides an opportunity to refresh cable’s view of market competition.

With cable shifted firmly into the broadband provision perspective, the whole calculus of cable vs. OTT changes. A “competing” stream of content can be seen as just another channel coming across cable’s network — a reason for consumers to subscribe to the anchor product. And cable’s own content becomes another product, available via apps, traditional subscriptions and alongside streaming content in dynamic packages and delivery models that are only just entering the discussion.??

As one cable COO noted recently, “Our goal is to put everything that’s on the Internet on all the screens in the house.” That’s the spirit. The old model of cable will decline, but that’s a sign of progress. Cable 2.0 will be the enabler of entertainment and connectivity for this generation and the next. The market is crying out for creative transformation, upping the standards of value and quality. Loyalty and satisfaction will follow.??

Carl Davies heads global solution marketing for cable, broadband and satellite at Convergys Corporation. Contact him at [email protected].