Technology | Media | Telecommunications

Thursday, October 30, 2008

Cable TV Must Prepare for a Mass Migration

According to a Parks Associates market study, cable television could see a mass migration away from its services, if providers do not improve their consistently low satisfaction ratings among current subscribers.

Their new report reveals that subscribers to satellite television and telco/IPTV are significantly more likely to be satisfied with their services than both basic and digital cable subscribers.

These market conditions leave cable carriers vulnerable to subscriber churn, and the market analysis recommends they quickly enhance advanced services like video-on-demand (VoD) to reverse this trend.

"Cable subscribers are generally less satisfied, which creates opportunities for satellite and telco/IPTV providers to grab customers," said Kurt Scherf, vice president, principal analyst, Parks Associates.

Although cable operators have improved service efforts, cable operators will still hemorrhage subscribers unless they are perceived as offering leading-edge features at equal or better value. In today's economic climate, carriers cannot afford to ignore these findings.

Cable operators have struggled in selling the value of their services, Scherf said, and framing their services as an enhanced and convenient form of entertainment will be critical in reestablishing higher satisfaction. VoD initiatives, particularly those aimed at delivering a "Primetime, Anytime" experience, should be key elements in this effort.

"Subscribers who actively use primetime VoD services show significantly higher satisfaction levels," Scherf said. "Primetime VoD offerings are potential ARPU generators and trigger churn toward the provider, a reversal of current market trends."