Tag Archives: Cable television

When You Don’t Know What Business You’re In

I started 2019 by buying a new home. When I say new, I mean brand spanking new as in “just built.” As I’m preparing to move in, I did what most folks would do first these days and called my local Cable TV/ISP to come set up the house. The builder did a good job of preparing the house for both cable TV and for wired internet and phone. There is a large junction box in a closet with both coax and Cat 6 wire running to most rooms. The living room and master bedroom both have conduit running into the crawl space for wires to be run easily. Frankly, I thought the hardest part of getting everything set up would be joining the coax and network wires that were hanging out of the side of the house to the main feeder lines. I was so wrong, and the reason why I was is quite instructional for any of us in business.

Hooking the house to the main lines was easy. Then, the tech set up the cable modem and router for my high speed (400MB+) wifi network. So far, so good, The problem came when I asked about connecting the wires that were in the closet to a switch or the router. None of them have caps – the little plugs – on them. “I don’t do that,” he said. But how can I connect the rooms to the network? What about putting the coax wires into a splitter for cable in the various rooms? At least that would help me identify which wires ran to which rooms. No help there either, even though he is the cable installer.

The final bit of laziness came when he informed me that he couldn’t run any cable through the conduits. He said he couldn’t find the conduit opening in the crawl space even though he pushed a long rod down the conduit and then went to look for it in the crawl space. I went down the next morning and found the openings in about 2 minutes. Yes, it was late (4p) on a Friday afternoon and I’m sure he wanted to get out of there, but still.

So here are some things we can all take away. First, the fact that the tech had no idea how to run wired internet tells me that the cable TV companies still think they’re in the cable TV business. Any look at the numbers will show you that people care far more about broadband and their ability to stream than they do traditional cable TV. If you are an Internet Service Provider, that you need to provide the damn service, and that includes wiring houses. I want my smart TV’s wired in, along with my game console. It’s a much better experience than via wifi, even high-speed wifi.

Second, the techs are customer service people along with being technicians. This guy was very nice but did nothing to solve my problem. To make matters worse he never left any paperwork so I have no way to know what exactly he did do. I can’t even tell you what my VOIP phone number is. Any company representative that deals with customers in any way should be trained to do so properly. They must have a focus on solving problems, not on creating them. And they certainly should never lie.

My ISP doesn’t know what business it’s in. They still think they are proving cable TV. They also still don’t understand how the power in all businesses has shifted to the customer. Let’s all agree to start 2019 by rethinking what businesses we’re really in and how we provide it to our customers, shall we?

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Filed under Consulting, Huh?

What, Me Worry?

If you follow the TV business at all you’ve probably noticed a bunch of recent articles about the acceleration of the cord-cutting phenomenon. This article from Business Insider is typical, as are the results:

In a recent Business Insider survey of 104 teens nationwide, only 2% of Gen Zs said that cable is their most-used choice for video content. Nearly a third said YouTube is their most-used source for video content, and 62% say streaming excluding YouTube, including Netflix or Hulu, is their most-used.

What’s happening is that many younger folks who once purchased a cable TV subscription are no longer doing so, and the pace at which that’s happening is rising quickly. As one piece noted,  “roughly 5.4 million Americans are expected to cut the TV cord this year, thanks largely to the rise in cheaper, more flexible streaming TV alternatives.” Is that significant? Oh yes:

According to eMarketer’s latest figures, the number of cord-cutters—adults who have ever canceled pay-TV service and continue without it—will climb 32.8% this year to 33.0 million. That’s higher than the 22.0% growth rate (27.1 million) projected in July 2017.

That’s a lot of money leaving the building, and yet there doesn’t seem to be widespread panic among the cable providers. Why not? Because they people who are cutting the cable cord are locking themselves into the broadband cord, and that, dead readers, is an even better deal for the cable guys. Why? Well, think about your own situation. I’ve got two options for TV service here – one cable, one satellite. Neither is appreciably different. The satellite is a bit less expensive but service craps out in bad weather so although it has some unique content and 4K, it’s not perfect. If I decide to cut the cord and take some TV over the air and stream the rest, I have only ONE option to get true broadband service, and that’s how most US markets are as well.

How this came to be is laid out in this Techdirt piece and I won’t repeat what they have to say. The short answer is that natural monopolies have developed and they’re not going to go away. Even if some company tries to enter the market (as Google Fiber did), the time to build the service is lengthy. Laws have been passed to prevent municipalities from entering the market and providing competition as well.

Given my druthers, I’d rather be a broadband provider than a cable TV provider. Your programming costs are almost non-existent, you know a lot more about how your customer is using the service (your ISP knows all, your cable TV guy is just figuring out how to track you accurately), your margins are great, and you probably won’t have any competition despite lousy customer service and usage caps. Who are the big broadband providers? Yep, the same cable guys who are “suffering” from cord cutting. You think they’re worried?

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Filed under Huh?, Reality checks, Thinking Aloud

Charging Facebook

I’m a believer in things repeating themselves in business, even if they take slightly altered forms or use up to date technology.  It’s an offshoot of my mantra about not confusing the business with the tools, I guess.  In any event, I got to thinking about a tidbit I picked up while going through my news feeds the other day.  It turns out according to SimpleReach, a distribution analytics company, referral traffic to the top 30 Facebook publishers  plunged 32 percent from January to October. Among the top 10, the drop was 42.7 percent.  The drop was confirmed by other analytics sources as well.  This, of course, got me thinking about cable operators and television networks.

Facebook logo Español: Logotipo de Facebook Fr...

(Photo credit: Wikipedia)

Like a cable system, a social network is a big, empty pipe.  It creates a method for distribution and little else.  All of the innovation at a social network is focused on improving that distribution and not on the content.  Back when the web started, publishers plugged right into the web and promoted like crazy to get “viewership.”  What Facebook and other social networks (read that as gatekeepers) have done is to take over much of the traffic creation.  This is exactly what happened when the world shifted from over the air broadcasting to cable, but there as a big difference.

In two words: affiliate fees.  This is compensation paid by the operators to the program providers.  It can run from pennies per home to $7+.  That’s per home, per month.  It’s a pretty strong reason why most “TV” content is only available with the blessing of a cable carrier (TV Everywhere).  Why would the publishers (content providers, a.k.a. TV nets) want to disrupt that business model, especially when the can supplement those dollars with ad revenues?

Back to Facebook.  Publishers spent several years building content islands on Facebook, only to have Facebook revamp their algorithm and sent less traffic.  The problem is this:

With social media driving over 30 percent of all traffic to publisher websites and Facebook delivering 75 percent of that social traffic, no publisher, from BuzzFeed to The New York Times Company, can afford to skip using Facebook as a means to promote its content.That gives increasing leverage to Facebook, which is able to greatly influence the prominence and visibility of publishers’ articles in the News Feed of its users.

So here is a prediction, one that might not happen for a couple of years, but one that I think, based on the history of cable TV, will occur eventually.  Content providers are going to charge Facebook.  I’m not talking about sharing ad revenues; I mean the digital equivalent of affiliate fees.  Someone will bite the bullet – a big guy like the Times or HuffPo or maybe BuzzFeed – and tell Facebook to pay up.  Maybe they will take technical measures to prevent their content from being shared there but they won’t publish it themselves.  One publisher gone is not a big deal.  Many publishers gone means an empty pipe, and that means fewer users and fewer ads sold for Facebook.

What do you think?

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Filed under digital media, Thinking Aloud