Video is a Huge Deal, for Telcos and Cable

The most-important fixed network bundle for U.S. consumers might be the dual-play “internet access plus linear video” package. There are several reasons. TV has the highest average revenue, and therefore the greatest impact on potential service provider cash flow.

Internet access arguably is the foundation service; the single most-important single service sold by any access provider, and arguably is the service with the highest profit margin for cable TV providers.

Comcast, for example, earns perhaps 46 percent of total revenue in its cable communications segment from video, while internet access contributes 27 percent. Voice represents just eight percent of revenue.

For telcos, the math is different, but equally strategic. Even when telco video services represented only five percent market share in video entertainment, video drove 60 percent of net telco account additions.

source: McKinsey
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