A Cable-isto Talks To His Dog at Lunchtime(With the TV On, Of Course)
By Tim Hermes, BTR Founder and Publisher
Tim: Hey, London.
London: You gonna finish that?
Tim: Since when do you eat tuna-fish sandwiches?
London: Since I found out they were edible, Harvard.
Tim: Very funny. So what do you think is gonna happen with the broadband business this year? Half the media says the box is dead, the other half isn’t so sure. And I’m not so sure it’s really that important.
London: Dude, I’m a dog. I sniff butts as a pastime. How the hell do I know?
Tim: C’mon London … I see you watch TV. And any bulldog video on YouTube, you freak out about. If you had fingers, you’d be surfing like a teenage girl looking for the latest on Justin Bieber.
London: Hey, the kid can sing. I feel his passion.
Tim: You are truly scaring me.
London: Alright, maybe I do know a little … Look, here’s the deal. Cable gets knocked a lot about its poor technical service reps, occasional outages, high price and indifferent online and phone help. Now there’s the whole over-the-top thing, talk about "cord-cutting," yada, yada.
However, according to NCTA/Kagan/SNL, cable put 12.4 BILLION dollars into infrastructure last year. There are 130 million households in the US according to the 2000 US census, so let’s assume about 140 million today. 127 million are passed by cable, and 60.4 million of them have at least basic service. Of the 127 million homes passed, a full 122 million are now high-speed data-capable. Of the 60.4 million customers enjoying cable TV, a full 43.8 million are now enjoying high-speed data too! That means in the 12 years or so high-speed Internet has been available; its uptake has been 73%! The voice stats are less, but still pretty impressive. And it wouldn’t be this way if there haven’t been big improvements in service. Yeah, the movie The Cable Guy set us back five years. But we’re past that. Just like Jim Carrey’s career.
Tim: I thought you slept all day.
London: Think again, Sparky. I listen to you talk this stuff all day. OK … So it looks to me that cable doesn’t really have a problem in the potential market area. The houses are already passed. With the number of homes passed and the obvious popularity of high-speed broadband service, growing popularity of phone service, and steady – but admittedly concerning – subscriptions to TV service, it sounds like it’s becoming a pure marketing play.
In my opinion, the fact that the broadband companies were started by the "cable cowboys" in the 40s and 50s and didn’t grow out of established, large corporations probably hurt the business in the 90s and 00s. Then consolidation took effect and lots of CAPEX went into getting all the systems to talk to each other and for standards – especially DOCSIS, to grow roots in both the vendor and operator side. Acquisitions and consolidations are expensive. They take your eye off the ball for sure. Now, the business needs to get down to brass tacks and really push its benefits – the fact that the infrastructure is in place, the comparable speed, the expertise at delivering content, the "triple play."
I certainly don’t want an ugly dish on my roof – I’ll still need phone and Internet anyway, and I don’t want a Verizon guy making a mess of my drywall. Yes, there are hurdles to overcome. Having multi-room DVR would be sweet in our system, especially when the Dog Whisperer is on. But it’s all there. It’s just time to sell it better. Comcast moving to branding itself as XFINITY is a great start. I’m sure there’s more to come. There’s more to market than just the TV service. And if high-speed broadband needs to fill the gap, it’ll happen. Tiered data service will happen in my canine opinion.
Tim: Man you know your stuff, Boy. You want to run BTR?
London: No, dude, I want your sandwich.
Tim Hermes is CEO at BTR. Contact him at email@example.com. London is his faithful bulldog and does not (currently) have an email address.