It’s no longer an unfamiliar scenario: At the end of the month, you find yourself going through your bills, trying to reduce expenses. In the age of the smartphone, you don’t really find yourself using your landline anymore. Still, according to your cable bill, you’re shelling out $30 each month on the utility. Doing the math, though, you see that if you were to get digital cable and Internet without the landline, your monthly costs might inch up slightly above what you’re paying now. Yes, you’re a “triple-play” customer, signing up for a “special deal” that gives you the three utilities likely for something like $90/month—but that’s before taxes and other fees.
In the age of customized services and over-the-top (OTT) programming, where users can access the programs they want to see whenever they want to see it, the argument could easily be made that cable providers need to give their offerings a facelift if they want to remain competitive over time. It doesn’t make much sense that adding a third utility, especially one that is becoming increasingly irrelevant to many people, should cause the price of a bill to go down.
The saving grace for cable providers is the fact that they have a stranglehold on the infrastructure through which OTT content is delivered.
“The problem the Netflixes have is they have to go over someone else’s network at some point,” explains Guy Bisson, research director of television at IHS Screen Digest. “Infrastructure matters, and that is the key to the future of cable.”
Furthermore, he says, cable needs to move on from its triple-play model and embrace hybrid delivery. In Europe, RGU growth has resulted from broadband and telephony offerings in recent years, but that growth is stagnating, meaning that cable providers need to look elsewhere to generate more revenue in the future.
“It’s about embracing OTT, multicast IP, CDN, control of the home network, the WiFi out of home network and of course embracing mobile,” he continues. “The problem cable faces is that it’s going to have to embrace all of these services and make them pretty.”