With Telcos Making Gains, Cable Must Think Big, Stress Operational Excellence

"When it is time to move, let us all move together." Geoffrey Moore, "Inside the Tornado."

As an MSO executive, cable industry professional, program content provider, or industry supplier attending the NCTA show in New Orleans, there is much to celebrate in an economy best described as "sluggish."

Comcast and Time Warner Cable gained more than $1 billion in new annualized revenue from digital video, voice, and high speed data in the first quarter.

The industry has demonstrated resilience in the face of a recession:

– Future gains in market share from directed digital advertising have been seeded;

– Competitive pressures from the phone companies and satellite operators are being countered daily;

– Commercial services are rolling out across small businesses;

– And the first steps have been taken to build the future for the mobile Internet.

These are very exciting times for the industry.

However, the "posse" is coming.

Verizon, AT&T, Dish and Direct TV added $730 million in new annualized revenue from consumer broadband and video services during the first quarter.

While traditional telephone line loss continues for the regional LECs, the speed of market penetration with digital video, high-speed data, and expansion of high definition services is increasing at an intensifying rate.

For the first time in recent history, the phone companies are introducing new consumer services to cannibalize their legacy offerings.

These are "uncharted" competitive moves, and illustrate the swift competitive actions required in order to retain market share position.

The period of mass market adoption of new digital services for the consumer market has arrived.

Marketing approaches which worked in the past are no longer the key to future success.

The competitive table stakes are higher today than yesterday.

Each MSO has a "golden opportunity" to identify their winners and losers within their service offerings.

If any of your video, voice, or data offerings are lagging the "posse," it is time for immediate change.

Change can be difficult to execute, especially with established service offerings.

The service line profitability, churn, competitive positioning, and the costs to promote, distribute, deliver, and support, need to be assessed.

Organizational leadership at the market, divisional and corporate business units is required.

You can no longer afford to become a niche player.

In the future, the market for consumer digital services, product leadership and operational excellence will create the competitive advantage.

Now is the time to move, and for the cable operators to move together from New Orleans to define the brands for market leadership.

(Bill Opet, Senior Vice President, Team leader of TMNG Global’s Cable and Broadband Practice).