Tuesday, August 21, 2012

Like Telcos, Cable Will Try to "Enhance Value" Rather than "Cut Price"

As telcos have tried to "add value" to their services rather than "cut prices," so too video entertainment subscription providers will try to emphasize "more value" as an alternative to "cutting prices." 

What remains to be seen is the success of such tactics, over time. At the moment, there doesn't seem to be much danger, though. 

Since people buy "content," and since most of the popular content is not easily available online or over the top on the Internet, video subscriptions still have drawing power. 

Monday Night Football is but one example of video content that remains exclusive to subscription services, The Hollywood Reporter reports. 

Adding online and mobile content access as a form of added value for video subscribers likely will remain a major tactic, even as some operators mull launching lower cost services in some way, and possibly will do, at some point.

In the past, telcos have had mixed success trying to "add value" rather than "cut prices." In fact, you might argue, even over the top messaging and voice services that do provide added value mostly are valued because they represent lower-cost alternatives to traditional voice and messaging services. 

But video is a different sort of product than "communications." The clearest example is the steady upward prices for video subscriptions every year, compared to declining nominal rates for communication services, or at least declining costs per unit. 


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