Jeff Kagan: Altice Enters US Cable TV Market

Jeff Kagan |

Get used to a new name in the cable television industry, Altice. This European company has decided to stick its toes in the US cable television marketplace by acquiring Suddenlink Communications. This is yet another sign of a major shakeup that is occurring in the cable TV industry. In fact speculation says they may be interested in Time Warner Cable (TWC) as well. So what does TV look like going forward?

The US cable television industry has changed and has seen many acquisitions over the last several decades. In the 1990’s, the industry was full of smaller competitors. Then a decade ago, Comcast (CMCSA) acquired AT&T Broadband who had acquired TCI and became the largest cable television company in the country.

Since that time there have been more mergers, but besides size, the industry hadn’t changed much. However over the last several years significant changes have started to occur in the space. Changes, which threaten the traditional cable TV marketplace.

This is something that industry leaders would like to stop, but no one can stop progress.

Threats to Cable TV Marketplace

Suddenly, traditional cable television companies are losing market share. That’s the first time this has happened, and it is putting enormous pressure on industry leaders like Comcast, Time Warner Cable, Cox, Cablevision (CVC) and Suddenlink.

The threat of losing market share is one of the key reasons I believe Comcast introduced Xfinity. It lets them create a new way to provide television over multiple channels like the Internet.

They are moving in this direction because new competitors like AT&T Uverse (T) , Verizon FiOS (VZ) and CenturyLink Prism (CTL) are eating their lunch. These are IPTV providers of television over the Internet. That opens up plenty of new and innovative services for customers.

In fact these new services have been winning awards regularly for quality and innovation. And there is more. New innovative ideas and companies like Netflix (NFLX) , Amazon.com (AMZN) and Hulu are also eating traditional cable television’s lunch.

Cable TV set itself up for failure by not paying attention to the customer over the last several decades. They didn’t have to care. They had no competition. So they only cared about the investor, not the customer. This was their key mistake and they are paying the price for it right now.

Last week Comcast once again stressed their commitment to improve their customer care. That sounds great, except that’s the same thing they said several years ago. Apparently it hasn’t worked for them yet. I guess it’s hard to break old habits.

This customer care problem is not just Comcast’s alone. Every cable television company suffers from the same issues, some more than others. Embracing a new way of thinking is apparently very difficult for these large companies.

So what does the future look like for TV? Yesterday we had to come home and sit down with a remote control in hand to watch what we want on the network schedule.

Going forward everything changes. The customer is in control. They get to watch what they want, when they want, on whatever device they want, wherever they are.

Signal will be sent over the wire line or wireless Internet. That means we can watch on our television, or computer or tablet, smartphone or smartwatch. And we can watch anywhere we happen to be, not just at home.

Everything is in the process of changing and reinventing itself in this sector. That’s exciting. However this is both an opportunity and a risk. It’s an opportunity for new players with big ideas and a risk for traditional players stuck in the past.

Altice Enters US Cable TV Marketplace

This is the world that Altice is entering here in the USA. This is a huge, new opportunity. However, only certain companies will be winners. This is what Altice will focus on going forward.

Congratulations to Altice for throwing their hat into the ring. It will be interesting to see what new kind of ideas and thinking they bring to the table. Will they make other acquisitions? Will they be trying to update the entire cable television space, or just their company?

We can be sure they aren’t just going to be doing business as usual.

Success in television going forward has two parts, innovation and customer care. Companies must hit it out of the park in both areas. However one thing is for sure, everything is changing. Doing business the same way will not work.

What will Altice add to the US marketplace? That’s the question. Keep your eyes open. We’ll just have to wait and see.

Equities.com columnist Jeff Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst and consultant. He shares thoughts on the changing industry, which he's been following for 25 years. He follows what's hot, what's not, why and what's coming next. Email him at jeff@jeffKAGAN.com

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
TWC Time Warner Cable Inc n/a n/a n/a 0
CVC Cablevision Systems Corp. n/a n/a n/a 0
AMZN Amazon.com Inc. 768.66 1.33 0.17 2,470,923
VZ Verizon Communications Inc. 51.49 0.36 0.70 10,101,462
CTL CenturyLink Inc. 24.12 -0.01 -0.04 7,962,690
NFLX Netflix Inc. 122.88 -0.36 -0.29 4,700,783
T AT&T Inc. 40.38 -0.03 -0.07 17,105,180
CMCSA Comcast Corporation Class A Common Stock 69.45 0.22 0.32 8,580,877

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