Karl Bode's appropriately cynical coverage of comments by Time Warner (NYSE: TWX) COO Rob Marcus caused a riddle to bubble up in my brain. Marcus, speaking at the Broadcast and Cable/Multichannel News OnScreen Summit, essentially downplayed Google's (Nasdaq: GOOG) 1 Gbps fiber optic system in Kansas City.
"It will be interesting to find out whether there are applications that will take advantage of a 1 Gbps service," Marcus said, according to Bode's coverage in DSL Reports. "If there is [a need for speed], we will provide it; our infrastructure has the ability to provide much faster speeds today. We're prepared to compete head-to-head with Google."
In a process painfully resembling paint blistering in the hot summer sun, a riddle formed in my mind.
Question: What do MVPD competition and the weather have in common?
Answer: Everybody talks about them but nobody does anything about them.
Technology has never been a problem for MVPDs. The way operators use that technology to better serve customers, on the other hand, has made the MVPD space the butt of late night jokes that repeat around the water cooler and unemployment line.
MVPDs have just never grasped the concept that technology can be used to engender subscriber loyalty and proactively to defeat competition.
I'll admit that the idea of loyalty is as outdated as a dial phone. My father worked 39 years for the same company and was fiercely loyal even when he was "retired" at the age of 55. I've probably worked at 39 companies, with varying degrees of reciprocal loyalty.
MVPDs, by virtue of their monopoly status in most markets, have had years to build brand loyalty. The results? When satellite hit the air using digital technology that cable companies had in hand but held in abeyance, cable customers stood in line to defect. When telcos started offering video, again using technology already available to their cable brethren, cable subscribers switched channels. And, just to show things go both ways, when cable companies used broadband to offer voice and data services, telco customers called them up to place orders because all they got from their phone companies was dial-up and, if they were very lucky, DSL.
By all accounts, people in Kansas City, given the opportunity to pay for it, want what Google's offering because it's more than what Time Warner Cable is offering. While Marcus' claims that TWC can step in and match the Google offer might be stretching it a bit, it's not out of reach that the cable operator can come close to matching it and, in fact, should have been there already.
Unfortunately, as the riddle's answer suggests, that's unlikely to happen, because to offer the service would mean to compete before the competition got a foothold. And that's something everyone talks about but nobody does anything about. -Jim