Wireless TV and IPTV are turning up the heat on traditional cable television in 2016. They are winning market share and this new competitive threat is only increasing. It started several years ago with AT&T (T) Uverse, Verizon (VZ) FiOS and CenturyLink (CTL) Prism. Now Frontier (FTR) TV is a player. Plus, other newcomers like Netflix (NFLX) and Amazon.com (AMZN) have joined in on the transformation of the way we watch TV. The next revolution is wireless TV. So with all this growth and change, what can we expect in 2016?
Cable TV companies like Comcast (CMCSA), Time Warner Cable (TWC), Charter (CHTR) and Cox have been losing market share to new competitors and new technologies. Unfortunately, most traditional cable television companies are not rising to meet the new challenges and that’s a problem.
Cable television has been around for decades. However, during the last few years, things have changed rapidly. There are many new competitors which use the Internet and wireless to provide service and introduce new services. This is something most cable TV providers simply are not doing.
IPTV and Wireless TV Rewriting Cable TV Industry
The entire television marketplace is being rewritten. What it takes to be successful in TV is much different today than it was just a few short years ago. Until a few years ago cable TV pretty much had a lock on the television marketplace. That’s because there was no competitive threat. Companies got fat, slow and happy. They won on Wall Street, but customers didn’t like the experience. Problem was, they couldn’t leave since there was little competition.
During the last few years, things have been rapidly changing. First, the nation's largest telephone companies started offering IPTV which is television over the Internet. This offered a better option compared to less innovative and old fashioned basic cable TV. Next, new competitors like Netflix, Amazon.com, Hulu, and more, started jumping in and changing the space even more.
Wireless TV is a Game Changer
Now wireless TV has entered the space and will play a key role going forward. In fact I think wireless TV may be a game changer. Consider how competitors like AT&T Uverse, AT&T DirecTV and Verizon FiOS offer television over wireless devices using their wireless network. And there is much more innovation we can expect going forward in 2016 and beyond.
This puts the entire cable television industry under enormous pressure to upgrade. If not they will continue to lose market share. This is a position it never expected and never prepared for. However it should have. The writing has been on the wall for years.
In this new world, traditional cable television is suddenly stuck in the old days and old ways. There are many cable TV companies in the USA. The vast majority simply deliver traditional cable television, period. Some offer Internet. But that’s pretty much it.
Cable TV Industry is at Risk
The entire cable television industry is now at risk of continued losses. What’s the answer? They must modernize and drag themselves into the new century kicking and screaming. Whether they like it or not, if they don’t, they will lose.
They must improve their delivery of television. They must use the Internet to deliver content. They must offer ultra-fast Internet. They must make their programming available over the wireless network to smartphones, tablet’s and watches. And it’s important to realize more changes will continue to transform the industry.
Potential Opportunity for Wireless Carriers
Change of this scale is both a great threat and a great opportunity. The opportunity is for wireless carriers who want to offer access to their wireless networks by cable television companies from coast-to-coast. Of course only wireless carriers with plenty of spectrum like AT&T Mobility, Verizon Wireless and Sprint (S) could consider such a move. I believe T-Mobile (TMUS) has very limited wireless data spectrum at this time.
The threat to traditional cable TV is real. The reason is simple. That’s what the competition is doing and that’s what customers want. If cable TV does not step up to this challenge, they will continue to show losses, year after year.
Cable television companies are not all created equal. Some are more advanced than others. Comcast for example is working hard and trying to be a player in this new space, which is much better than the vast majority of competitors in their space. However, market share losses for the entire industry continue to expand.
Cable TV Paying Price for Own Shortsightedness
It’s too bad cable TV is hurting so badly right now. However, the blame is their own. Cable TV never cared about the customer before they had competition and started suffering losses. If they had, then maybe the customer would care about them. However, since cable TV didn’t care about the customer yesterday, the customer doesn’t care about them today.
And that’s the weak link in the cable television chain. Will cable TV stabilize their losses and start to grow once again? We’ll just have to wait and see.
Weak Link for Cable TV Industry
However, competition continues to ramp up like this Frontier TV alongside AT&T, Verizon and Centurylink with wireless TV, satellite TV, IPTV and more are changing the game.
So keep your eyes on this entire changing television space as it blends with wireless, Internet and television going forward. 2016 will be an interesting year as these industries continue to change and to merge creating all sorts of new and advanced programming and services. Traditional cable TV is yesterday. New IPTV and Wireless TV are tomorrow and they are here today.
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 atjeff@jeffKAGAN.com.
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