Wednesday, February 25, 2015

Cablevision Makes "Big Shift:" Now is a Connectivity Company, not a "TV" Company

Cablevision Systems Corp. now says its most important product is Internet connectivity. The corollary is that, at some point, “I would suggest that we'll probably be agnostic about the video and not about the connectivity,” said James Dolan, Cablevision Systems Corp. CEO.

In other words, Cablevision has become more agnostic about linear video and over the top streamed video. Cablevision also is clear that high speed access is the foundation of the coming business.

“Connectivity has surpassed video as the primary product for a company like ours,” said James Dolan, Cablevision Systems Corp. CEO. “The consumer values the connectivity product more than they do the video product at this point.”

That is a “big shift,” said Dolan. If given a choice of linear video or Internet access, consumers “almost overwhelmingly will take the data product.”

And though it remains to be seen whether the current vision is the ultimate vision, Cablevision does not currently seen its Freewheel Wi-Fi- based phone service as a competitor to mobile service.

“We're not chasing the cellular markets to be a mobile phone provider,” said Dolan. “That's just not what the strategy for this product is about.”

And we should assume other products based on Wi-Fi access--inside and outside the home--are coming.

“There are products and services that will go along with that strategic position,” said Dolan. “The first of which you've just seen, which is Freewheel, but there will be others.”

“Wi-Fi is a critical part of our product strategy and one of our most important strategic assets,” said Dolan.

There are several important insights here. First, Cablevision sees itself as a connectivity company, not a video services provider.

Also, Wi-Fi is seen as a key building block for new services, beginning with a new Wi-Fi-based phone service, but likely to be followed with a mobile video consumption service.

Finally, Cablevision finally has launched a service it first envisioned in the late 1980s, namely an untethered communications service distinct from what we now know as “mobile phone service.”

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