As the streaming TV wars intensify, cable TV companies are on the ropes, ducking and swinging back with innovative new strategies and tactics to compete.
Experts and analysts would be delusional to count out the $330 billion Cable TV industry from the future landscape of home entertainment.
Although the number of cable television subscribers in the United States has declined nearly 27% from 98.7 million in 2016 to 72.2 million in 2020, the industry is still a formidable incumbent.
The threat to the embattled Cable TV sector is particularly acute with Gen Z and millennials who are cutting the cable cord faster than other segments of the population.
Seismic Demographic Shift
These up-and-coming generations represent the greatest advantage for streaming TV and cable’s Achilles heel.
With nearly 90% of millennials opting for video streaming services, followed closely by 80% of Gen Z and 77% of Gen X, Cable must adapt quickly by convincing younger audiences to adopt its service.
It needs to figure out new ways to satisfy shorter attention spans and serve up vast libraries of video content on-demand on every available platform.
But it is shortsighted to conclude that the future of cable TV is doomed. It can leverage its competitive advantages to fight back against streaming TV.
How Cable TV Holds Its Ground in the Streaming TV Wars
Mainstream media has a short memory and seems to be forgetting that cable still retains 56% of the total pool of subscribers.
If anything, cable is going down swinging by offering less expensive, streamlined plans to narrow the gap between its monthly subscription fees and those of streaming.
Comcast’s Xfinity introduced its Choice TV plan in March 2023 for consumers who want to watch live TV without a set-top box. It offers a basic lineup of local channels and some add-on packages for as low as $20 per month.
In a radical departure from its standard operating model, Xfinity provides the service with no contract and is experimenting with “genre packs” that empower consumers to customize their channel lineup.
It also leverages its strengths in the core business to sweeten the deal by offering access to Xfinity Stream app and Cloud DVR plus seamless integration with other popular streaming services like Netflix, Amazon Prime Video, Hulu, Disney+, and free channels including Pluto TV and Sling Freestream which offer another 400 live TV channels and 80,000 on-demand choices.
The smartest move an incumbent can make to defend its leadership position from emerging competitors is to embrace them by leveraging their market power, trusted relationships, and deep insights to create value for customers and stakeholders.
Billion-Dollar Quest to Learn What Cable Customers Demand
Toward that end game, the cable industry is investing billions in research to understand the needs and behavior of different customer segments and tailoring their products, services, and integrated marketing efforts to lock them in.
Collaborating with the newcomers to learn from their strengths, share best practices, and explore new opportunities for growth and differentiation is Cable’s best bet.
These strategies can help the incumbents exploit their advantages, adapt to changing market conditions, and fend off the grave threat of streaming TV disruption.
Meanwhile, Spectrum was a pioneer in the thin bundle space, rolling out its TV Choice plan in 2019 at a monthly price point of $24.99. Consumers customize their plan by choosing 10 channels from 65 options including major networks, sports, news, and entertainment channels. This plan also includes access to thousands of on-demand titles and the Spectrum TV app.
It must not have gained much traction because in July 2023 the service was discontinued for new customers with Xfinity ostensibly stepping in to fill the gap with its competitive offering roughly four years later.
Even so, when reinventing itself, not every new initiative or innovation is going to be a hit. That said, Spectrum’s decision to retreat may have been more due to short-term thinking in the boardroom than a fundamentally ill-conceived business model.
Blueprint For Future Innovation
In the long run, offering more customization and personalization options is the right strategic direction for Cable. As it battles to regain lost ground and stem the bleeding from lost subscribers and advertisers, it needs to keep pushing the envelope by allowing customers to choose their channel packages, create profiles, and access recommendations based on preferences and viewing history.
This, combined with a cross-platform technology-driven mindset, would boost the appeal of Cable for viewers who want to have more control over their content and pay only for what they watch.
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