A funny thing seems to be happening in the Pay TV space. We always thought it would be Apple TV that would transform cable television, but instead, over the last few years we have seen AT&T (T) Uverse and Verizon (VZ) FiOS take that honor. Even CenturyLink (CTL) Prism is joining the party. Now AT&T DirecTV, Verizon Go90 and Apple (AAPL) TV are punching with more blows to the weakened cable TV industry. Will this be the final blow to companies like Comcast (CMCSA) , Time Warner (TWX) Cable, Charter (CHTR) and Cox?
It all depends on how traditional cable television reacts to these new industry threats and challenges. New competitors and new technologies are transforming the traditional television space. Cable TV does not have a good quality relationship with their customers. They never had to build one, so they never learned how to do so.
Cable TV was always the only game in town. So, since the customers didn’t have a choice and could not leave, cable TV never cared about taking care of, and building relationships with customers. However, all of the sudden, the customer does have choice, and they are leaving the traditional cable TV industry. Cable TV has been losing customers over the last few years. Suddenly, the industry is struggling to create quality relationships with their customers.
Competitive Threats to Cable TV Growing
Threats to traditional cable television are emerging in recent years. These threats are lead by telephone companies offering IPTV. Now that AT&T and DirecTV have merged, and Verizon is launching their go90 through their FiOS unit, the threat and challenge to traditional cable TV is increasing.
Now Apple TV, if successful, could turn the heat up even more, and further transform the space. Plus, I see more competition coming all the time. There are plenty of competitors like Dish, Google (GOOG) and others who can also make an impact. Added to Netflix (NFLX) , Amazon.com (AMZN) , Hulu and others, the television space is definitely in a major transformation.
New TV Technology is Also Changing Everything
The way television is delivered and watched is also changing. No longer do we have to sit at home at a certain hour to watch our favorite shows. Television is going wireless. That means we can watch it on our smartphones or tablets, over the wireless network, anytime and any place...and this changes everything.
Bottom line, cable television is in the sights of many new competitors and new technologies, and cable is feeling the heat. So what is the future for cable TV? That’s the sticky question.
Prediction for Cable TV
I predict some cable television providers will transform and start to grow again. They will remain strong competitors in the industry. However, some will try and fail, or not try at all. These are the losers. These companies will fade. They will likely be acquired by competitors over the next decade.
There are no guarantees, and cable television companies will no longer own this space. There will be wins and losses. The only question is...to what extent. Remember how new competition and new competitors transformed other industries?
One thing is for sure: Cable TV is no longer bulletproof. Changes are afoot, and making the right choice as a customer, worker and investor is key.
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.
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