Linear Video Business is "Failing," Says ACA

Small U.S. telcos and cable TV companies have noted for a couple of decades that it is hard to make profits in the linear video subscription market. The reason is simply that scale is necessary, and, by definition, very small telcos and cable TV companies do not have scale.

Still, it is almost shocking to hear American Cable Association president Matt Polka say that the cable TV portion of the access business is "failing."

That is analogous to a major telco industry executive saying the voice business is failing.

And, of course, the same process has happened for telcos: voice, the traditional revenue driver, has ceased to support growth for quite some time. In 2013, for example, global revenues were dominated by mobility services. Voice services on fixed networks contributed less than 20 percent of total.

Already, internet access drives U.S. cable operator gross profit, while video contribution continues to shrink, even for the tier-one cable operators.

source: Insight Research


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