This feels a little like déjà vu. The country’s top cable and satellite TV providers just wrapped up another quarter of record subscriber declines as customers flee traditional pay-television distributors in favor of streaming and on-demand services, according to a research note from MoffettNathanson. Combined declines for the second quarter of 2017 came close to a million subscribers, the firm estimates, with Dish Network, DirectTV, and AT&T hit especially hard. As bad as it was, the customer exodus was not as bad as some analysts had predicted, prompting analyst Craig Moffett to ask the question, “Is ‘not as worse’ even a thing?”The pace will continue downward because cable companies are not keeping up with their competitors, except for maybe DirectTV, which a few months ago launched a streaming-only service called DirectTV Now, which streams live shows.
“[Y]es, things are getting worse,” Moffett wrote. “But at least in Q2 they got worse more slowly. Less worse. Or, not as worse. Or, well, you get the idea.”
If all this sounds familiar, it’s because three months ago, the industry had just logged its worst quarter in history, losing an estimated 762,000 pay-TV subscribers. This time around, that number has jumped to 941,000 subscribers. Even Comcast, which had been bucking the trend over the last few quarters, ended Q2 with a net loss of 34,000 pay-TV customers. [Link]
My wife and I moved to a new-construction house two months ago. It took forever for our address to validate and propagate through databases, especially Comcast's. They connected us only two weeks ago, insisting until then that our house didn't exist. We had been using DirectTV Now to fill the gap, watching it on TV using an Amazon Fire stick with our smart phones' wifi hotspot turned on. (Thank goodness for unlimited data plans.) When I was finally able to get Comcast to agree I existed, I became so disgusted at the continual TV upselling the customer agent was doing, and the endless fees and additions, that finally I said bluntly, I want internet only and if I can't get that then AT&T will take my call, too. Of course, AT&T does the same thing. DirectTV Now and Hulu Live are two of the main competitors to connected cable service. Of course, DirectTV is itself a connected cable satellite service, but the Now service is internet only. Hulu has been around a long time and has just this year got into the act of offering live TV.
Both DTVN and Hulu Live stream a number of live channels but none are local stations. The services' channel selections are mostly redundant. I tried both of them and finally decided to keep Hulu, but that decision was based more on Hulu's promises to expand than its present offerings. Neither of them require any of their own hardware, just a Roku or Fire Stick or the like - see their sites for details.
DirectTV Now's main advantage is that it works on more devices (Hulu does not yet offer a Roku app) and you can watch it on the web, which you cannot do with Hulu Live. Both work on smart phones and tablets. However, you can watch all the rest of Hulu's stuff on the web, a device or on your TV. DirectTV Now has a very limited on-demand selection. DirectTV Now also loads much slower that Hulu Live and often it did not load at all on our TVs using either our Amazon Fire Stick or our Roku 3. Also DTVN skipped and stuttered or paused a lot. One of the main decision points for me was that Hulu offers live major-league baseball games, which are absolutely not available on DirectTV Now, and I assume DTVN is similarly restricted for other sports. As I said, local channels? Fuggedaboudit on both services. We bought over-the-air HD antennas for local-channel broadcasts. I finally decided to keep Hulu Live and cancel DirectTV Now, even though the inability to watch Hulu's service on my computer is a major, major disadvantage for me. But that I can watch MLB games live is a huge advantage. Huku promises that PC viewing and Roku viewing are both coming, hopefully soon. I expect that both services will expand offerings and devices in the coming weeks or months.
Another big deal for both services is that there is no contract. They are both month-to-month. There is also YouTube Live, which seems really good and offers a one-month trial period, but its market is limited to large metro areas, so far.
There are other such services. My advice is to do a lot of research and take full advantage of trial periods.
At our prior home we had Xfinity's X1 service, which I really liked. But after so many weeks in a row of not watching TV at all, or watching very little, my wife and I both got used to two things:
- TV not being as big a deal as we used to think it was, and
- Not paying major bank to Comcast every month to rent many dozens of channels that we never watch.
There are channels on Hulu we don't watch, too, but not at near the cost. And we already had a Fire Stick and a Roku, but Comcast piles on fees every month: $10 per DVR/box, $10 for HD channels, $7 or so for sports, additional fees for local channels.
That said, Comcast does have an amazing streaming service that is really outstanding - but not by itself. You must have some level of their traditional cable TV service first. Bummer. Honestly, if they offered a streaming-only service, they would be king of the hill. I'd buy it for sure.
Maybe it is time for Comcast to ask themselves that crucial question, What Business Are You Really In?
Harvard Business School professor Theodore Levitt, back in 1960, captured one of the major challenges most companies face today. His now classic article Marketing Myopia begins this way:
Every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline. Others which are thought of as seasoned growth industries have actually stopped growing. In every case, the reason growth is threatened, slowed, or stopped is not because the market is saturated. It is because there has been a failure of management.
That failure is caused by what Levitt called “marketing myopia” which he defines exactly as you would expect. It’s what occurs when company leaders define their mission too narrowly; it’s a form of business nearsightedness or shortsightedness. Levitt offered what are now a few classic examples.
On the flip side, he cites companies such as DuPont, and Kaiser and Reynolds that have thrived for centuries by remaining thoroughly customer focused and that evolved—in terms of the products and services they offered—as the needs of their customers did.
Industry Myopic Purpose The Broader Purpose Railroads Train Travel Transportation Hollywood Movies Entertainment Oil Companies Petroleum Energy
What a concept.
Posts
