I had a friend (and yes, I know that's a straight line) back in the days when long distance carriers were falling over themselves to get customers. His game, he told me with a silly chuckle, was to take whichever one of them had the best offer at any minute.
"Hey," he reasoned, "they keep calling and offering me better prices. What do I care? I still get long distance and I get a better price."
The telecommunications second quarter earnings announcements caused that memory to bubble back up into my increasingly deep pool of memories because, it seems to me, that's a lot like what's happening now. People are just moving around to get the best TV deals. It doesn't matter if they come from a cable operator or a phone company or a satellite provider or over-the-top. Customer loyalty, after all, has gone the way of pensions and health benefits.
Today's pay TV subscriber's reasoning is simple: whatever looks good and doesn't bust the budget is the service to get.
While those who have for years seen the sky falling and the cords cutting insist that this is the end of pay TV as we know it, I'm more inclined to believe that this is the new way of looking at pay TV based on price, features, customer service and other intangibles. When all those factors stack up, subscribers flee traditional cable providers and run not towards untested, difficult-to-use OTT but in the direction of comfortable non-traditional wireline services from IPTV and satellite providers.
I did a quick and dirty analysis of the numbers service providers puffed up for the quarter and came away with a different opinion than others, most particularly Boon Dog Research, which saw a cord cutting trend among Canadian operators. My eyes behold cable shaving or IPTV transitioning. How else do you explain all the losses on the cable side and gains on the telco side? While the numbers didn't add up to a total telco takeover and some subs did wander off into that nether world where it appeared they're no longer paying for TV, I believe people just left cable and went next door to the phone company for IPTV--where it's available.
Why not? Cable operators have traditionally offered customer service that was so bad it made the phone company look good. They've continually jacked up prices without really making a concerted effort to explain why. On top of that, there's been a perceived arrogance about the cable industry that has turned off a large portion of its customer base.
So when someone--an IPTV provider, for instance--comes calling with the same programming, maybe a little better or different features and a better price point, subscribers are going to take off. Like my friend all those years ago, they have no loyalty to who's filling that pipe to their home; it's up to the providers to work out the details of how to deliver the service and make money.
While even I would admit that cord cutting is a temptation and that always-higher fees for TV are a turnoff, I really can't give the idea as much credence as others in the industry. Subscribers aren't cutting cords; they're changing what goes through them and who puts it there.--Jim