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Can Cable TV Survive the 5G Wireless Threat?

By Jeff Kagan
Aug 30, 2019 10:07 AM PT
traditional cable tv companies could lose everything in the next decade if they don't change

Traditional cable TV providers will face a big competitive threat in the next decade from the Internet, IPTV and 5G wireless. Cable TV typically lands at the bottom in customer satisfaction surveys. That means there is both plenty of room for improvement and plenty of room for new competitors and new technologies to jump in and quickly win.

When cable TV companies had no competition, they didn't care about the customer. They didn't have to. Users had no alternatives. Back then, the companies focused solely on investors.

Things are changing. In the last decade, new competition and new technologies have risen to threaten cable TV's hold on the industry, and the pressure has been increasing on that front.

Where cable TV companies face competition, they have been behaving better with their customers. In areas where they don't yet face competition, things haven't changed much. That's going to bite many of them if they don't get smart, upgrade their offerings, and improve their customer satisfaction rankings.

Today the primary service for the cable television industry is not TV -- it is high-speed Internet. Today, pay TV, wireless and other services are only legs on the Internet stool.

The competitive threat on all fronts will increase with 5G. It could replace the high-speed Internet service, pay TV and wireless services.

That means the traditional cable television industry faces the biggest threat ever, and it's coming on fast and strong.

Blind to the Threat?

The pay TV industry has changed immensely over the last decade. Today, the leaders are Comcast Xfinity with NBC Universal, and a new competitor, AT&T TV -- with services like DirecTV, DirecTV Now and WarnerMedia for news and other content. Charter Spectrum has fallen to third place; then come Altice, Cox and others.

The change wave is not over. It will continue to challenge and reshape the entire industry going forward. So, in this new world, which companies and technologies will lead the way and which will fail?

Some traditional cable TV operators have been working on improving their customer satisfaction in recent years. While that is admirable, and while some have shown improvement, the industry as a whole still ranks at the bottom of customer satisfaction lists.

It is unsettling that many traditional cable TV companies don't seem to understand the risks they face. Their marketing teams seem to be wearing blinders, in several cases, going down the same path as before.

Perhaps they don't see what's coming. Possibly they do see it, and they are trying to slow down this industry transformation as much as possible, in order to hang onto as much as possible for as long as they can.

It's hard to believe the cable TV industry is blind to the obvious threats. Any way we slice it, the fact is the cable TV industry needs to get up to speed or risk losing everything.

Cable TV Must Cannibalize Itself

The only good choice for cable TV companies is to lead the charge and cannibalize their businesses before competitors eat them alive. If they try to hang onto what they had for as long as they can, many of them risk their own future viability.

In the past, changes have sent companies from positions of industry leadership to the competitive basement with breathless speed.

Just think of how Apple, Google and Samsung changed everything in the smartphone space, with the iPhone, Android operating system, and Galaxy line respectively. They took the lead and sent BlackBerry, Nokia, Palm and other one-time leaders to the back of the line. Yesterday's leaders were blind to how quickly they could slip from the top to the bottom.

This could happen with traditional cable TV if the companies are not ready for change. If that happens, the industry will face a chaotic next decade as new competitors and new technologies transform it.

There will be some winners and some losers. The question is, which category will each cable TV company occupy?

5G Wireless Pay TV and Internet

5G wireless is the next big technology that will challenge the traditional cable TV providers. This new competition should bring innovation, improved service and faster speeds. It also might bring lower costs, but that is less certain.

Some wireless carriers have started to move into the 5G pay TV space. With a small device mounted on the side of their house, users are starting to see what tomorrow will look like.

This device, which connects to the nearest 5G wireless tower, provides a connection to high-speed Internet and pay TV services. As 5G expands over the next decade, and as all the wireless providers move into this space, and as new companies and technologies jump in as well, it could turn the entire industry upside down.

Only the companies that understand the coming threat and opportunities will do well going forward. Those that live in the past face an uphill journey while the rest of the industry passes them by.

Traditional cable TV competitors could wake up and join the 5G race. I hope they do. Looking forward, being a leader with innovation and a willingness to cannibalize is the path to success. It's the only way to compete with new competitors, new technologies and new thinking.

That is the serious threat facing the traditional cable TV industry today. A decade ago, cable TV companies tried to enter wireless and failed. The question is, do they understand the threat they face now, and will they act in time? Will they continue to be players in wireless going forward, or will history be repeated?

Growing List of New Pay TV Competitors

Traditional cable TV companies are Comcast Xfinity, Charter Spectrum, Altice, Cox and countless smaller firms.

5G wireless pay TV companies are Verizon Wireless, AT&T Mobility, T-Mobile and Sprint. They not only will compete but also will innovate and change the industry.

Companies like Netflix, Hulu, Amazon TV and many others also will challenge the industry with their new thinking.

Plus, new competitors and new technologies will enter as well, creating a very fluid and dynamic marketplace over the next decade.

Today, cable TV is like the deer wandering onto the train tracks despite a locomotive coming right at it. Competitive threats like wireless 5G pay TV and Internet will change the sleepy cable TV industry unless it wakes up, sees the train coming, and acts in time.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.


Jeff Kagan has been an ECT News Network columnist since 2010. His focus is on the wireless and telecom industries. He is an independent analyst, consultant and speaker. Email Jeff.


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