Virgin Media – pirates of suburbia


Another Study Shockingly Discovers That Cable TV Needs To Compete On Price

from our “well-duh” department

For the last decade the cable and broadcast industry (Sky now Comcast) and UPC (now rebranded Virgin Media) have gone to great lengths to deny that cord cutting (dropping traditional cable tv for streaming alternatives and/or piracy) is real. First, we were told repeatedly that the phenomenon wasn’t happening at all. Next, the industry acknowledged that, certainly, a handful of people were ditching cable, but it didn’t matter because the people doing so were losers living in their mom’s basement. Then, we were told that cord cutting was real, but was only a minor phenomenon that would go away once the “Millennials” started settling down.

Of course none of these claims were true but they helped cement a common belief among older cable and broadcast executives that the transformative shift to streaming video and other services could be easily solved by doubling down on even more bad ideas. More price increases, more hubris, yet more denial and more useless equipment. Blindness to justify the milking of a dying cash cow instead of adapting to the new reality.

Shockingly it’s simply not working, VM’s recent switching off of analog services, for better broadband seemingly but no new offers have been made except for a price increase and enforced switching to their highest priced offer in order to continue to receive a similar range of channels and the ever diminishing drop in TV takeup demonstrates this, with the third quarter seeing the same old story, as a significant number of subscribers melt away. A study this month by Morning Consult once again made the obvious point that if cable wants to adapt to this new competitive threat, they absolutely must compete on package flexibility (giving users greater control over the channels they choose in their bundles) and price:

“The poll, conducted from Oct. 18-19 among a national sample of 2,201 adults, found 65 percent of respondents said that TV bundles force consumers to pay for channels they don’t want, with 73 percent of Americans saying they would prefer to choose the exact channels included in their cable or satellite TV packages.”

For most people, cost was the biggest reason for cutting the cord: 63 percent said the expense of a cable subscription was a major factor in dropping it, while 53 percent said the same for ending their satellite subscription. The second most common factor for cancellations, cited by 37 percent, was the ability to access all desired content through streaming services.

That cable needs to finally seriously compete on price isn’t a new message; it’s just that the industry doesn’t want to hear it because they don’t have to.

That is largely because these companies have an ace in the hole: a growing near monopoly over broadband in urban areas.  Most have responded to the cord cutting threat by raising prices on their captive broadband customers.

Again, there are no good choices here if you’re a cable and broadcast industry executive actually interesting in staying in the TV business, where actual competition is only just starting to heat up. Either you ignore consumer demand for a cheaper, better, and more flexible product and suddenly find yourself in a terrible hole (but keep on digging) and far behind more agile competitors. Or you adapt, take an upfront hit and at least get out ahead of a trend that’s been obvious for the better part of the last decade.

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