Cable TV service is in a transitional phase. According to the marketing research firm cg42, five million people will cancel their cable subscriptions in 2018, a 685% increase over 2016. This growing rate of cancellations is part of an ongoing transition by consumers to a streaming-only model of viewership, and it poses a substantial risk to cable companies. But is their decline inevitable?
Though streaming services have a clear edge over their more traditional counterpart, cable doesn’t have to go down without a fight. By taking an innovative view of media production and distribution, cable can resist the streaming takeover.
Focus On Loyalty
One of the main weapons that cable television has in the fight against streaming is users’ real loyalty to providers, as well as to specific channels. For example, the lifestyle channel TLC, which doesn’t distribute its shows via streaming, finished 2017 as the fastest growing channel among women ages 25-54 – a demographic that otherwise primarily relies on streaming for their programs. Though their competition may be struggling, TLC carefully selects their shows and focuses on maintaining multi-platform relevance.
Cable companies have struggled with both programming and relevance – they don’t have the programming control of an individual station and many lack additional forms of engagement beyond in-home service. However, if they can build alternative platform approaches that remain linked to their current paid programming model, loyalty alone could help them gain back market share.
Building Better Bundles
Another way that cable TV companies can increase their popularity with users is by creating better product bundles. Right now, the best that most companies offer is a combination of cable, internet, and home phone (which most people have already dropped). But they have much more at their disposal and users want to know what’s on offer.
Service navigators like InMyArea can help consumers pick the best cable provider based on which plans offer premium channels, including foreign channels, streaming add-ons, and on-demand viewing options. And cable companies need to keep the cost of these services under control, transforming them into standard offerings. Historically, these add-ons have been very costly, but if cable providers don’t offer them at a reasonable cost, viewers will find them – often for free – online.
If bundling services like highly profitable premium and foreign channels isn’t an option, another strategy that can benefit cable providers is building partnerships with screaming services. Right now, if users want to view streaming content anywhere besides on their computers, they need to buy a separate device, like an Apple TV or Firestick. This separation of services is yet another reason why consumers are prioritizing streaming or cable, but not using both simultaneously. It’s bulky, costly, and cumbersome.
By creating technology-driven partnerships with streaming providers, cable companies can encourage a greater number of consumers to take an additive approach to services and combine cable and streaming. Right now, for example, Comcast is already successfully partnered with Netflix and YouTube to provide their services through the Comcast cable box, and they’re trying to negotiate a similar arrangement with Hulu – and other cable companies should attempt the same. It’s a high stakes endeavor with a low barrier for entry – the streaming services don’t sell the devices that link them to TVs, so adding other formats doesn’t challenge their profit model.
Forming partnerships with streaming services could be especially advantageous for cable companies that want to secure certain transitional audiences: young people leaving the family home who are used to having cable access, older viewers who’ve always had cable but are curious about streaming, and young couples with children who want better control over what their children watch. All of these groups are in a position where changing their services might be desirable, and cable companies need to open the lines of communication and encourage them to make cable a priority.
The Live Advantage
Finally, one of the primary advantages that cable companies continue to have over streaming services is their ability to provide live programming. The continued popularity of reality television, sports, and even the importance of local emergency alerts can help cable remain relevant. Though some streaming services have begun to offer limited live offerings, cable still controls this niche.
Additionally, live programming is part of an overall craving for linear TV and a predictable experience, something streaming services can’t offer. People enjoy the scheduled control of watching a channel and knowing when their favorite program starts and ends and even scheduling parts of their lives around it. Streaming, with its emphasis on binge-watching, does exactly the opposite, even if it can bring live programming onboard.
Regardless of how cable providers choose to address the problem, the coming decade is going to bring significant changes to how people watch TV. By 2025, viewers may have the option to select channels that are fully personalized to their liking based on better algorithms, producers will have greater creative freedom, and commercials won’t be considered the cost of enjoying a program. For cable providers to keep up in this ecosystem, they’ll need to learn to think more like their competitors in streaming – and work beside them.