With cable operators rebranding themselves as “broadband providers,” the term “cable TV” has fallen out of favor in recent years. The impact of cord cutting, increasing retransmission fees, increased competition from streaming services and changing demographics have all contributed to an industry approach that now considers “video” just another service from the local operator.
While the larger providers can often protect themselves from the changes in consumer interests, smaller, independent cable operators have to continuously evaluate the rising costs and routinely ask themselves, “is it still worth it for me to offer a video service?”
That was the focus of a panel discussion, "Video is Evolving: How to Win in a Changing Video Ecosystem" at The Independent Show held by the NCTC at Disney World this week.
I moderated a panel that included Mark Rankin, CFO, of Summit Broadband in Orlando, Geoff Shook, President & GM, Buckeye Broadband in Toledo, Ohio, and Sandra Tilley, senior vice president of Brand Strategies, EPB, Chattanooga, Tenn.-based provider of broadband services.
‘Hard Conversations’
Providers now see offering video as a service as one of numerous options that will attract and keep customers rather than one that will automatically improve a broadband provider's bottom line, the panelists said.
“In and of itself, I don't believe that video is still a strategic product on its own,” Rankin said. “Having said that, though, I think you need to think about where you deploy it, how you deploy it, how it helps broadband, and certainly as a bulk provider in Florida, serving 55-plus communities, it's a strategic product for us in how we go to market and win business.”
Shook agreed that video is still essential, but with caveats.
“Our philosophy is there'll always be a video product as a part of our catalog, [but] I think that we continue to have the hard conversations over what that product looks like and how we make it affordable,” he said.
Shook acknowledged the importance of his shrinking list of “video-only” customers and said “we don't want to walk away from that,” but he also cited the growing costs that have forced Buckeye to reconsider what channels to carry on a regular basis.
Our philosophy is there'll always be a video product as a part of our catalog, [but] I think that we continue to have the hard conversations over what that product looks like and how we make it affordable.
Geoff Shook
“We've made some really difficult decisions regarding carriage because we just cannot afford to continue to take video rate increases from the programmers,” he said. “Our customers push back and when they get a change in their bill they don't just shop video, they shop everything and so we've walked away from several programmers, but we've also provided resources and options for those customers to find another way to to still get the video and still depend on us to help facilitate it.”
EPB’s customer base is primarily older, according to Tilley, so video still plays an important role. Nevertheless, she continues to look for new ways to partner with third parties to maintain and improve their services.
“We've been able to maintain our market share, and we haven't seen any decline in our broadband because of a loss of video,” she said. “But we do have a customer base which is primarily older that has a high value, and we're looking at how we can continue to offer a quality product. We're working with TiVo now to try to see how much cost we can get out of it by going managed, and we think that that allows us to hold our pricing, keep it at a value for our customers, and still make a short, small margin.
“We don't look at video as a big margin producing product, but I will say we are looking for anything that is the right next thing to bundle to protect our broadband market share,” Tilley added. “So we're going to continue to watch what happens with video and look at maybe broadband TV.”
Simple and Seamless
With increased competition from streaming services, particularly in live sports, panel members agreed on the importance of making it simpler for customers to navigate the increasing variety of sources as well as the complexity and fragmentation of the current scenario.
In response to this, Rankin said he isn’t as concerned about the fact that more big ticket sports are now only available on paid streaming services.
“We don't see that as the bigger problem; it's finding it that’s the challenge and the complexity that customers feel,” he said. “It's middleware that's hard to navigate that is a problem. So the more that our vendors can help us with middleware that makes it easy for customers, I think will make a big difference.”
Tilley cited a campaign by EPB to help their customers better understand the changing video landscape and provide the needed assistance, regardless of who they choose to sign up with—whether it’s their video service or a streaming bundle.
“About five years ago, we rolled out what I call our ‘cord-cutting campaign,’ but really the whole point of it was to say, ‘we want you to have TV the way you want it; we want you to have choice, and we're here to help you,” she said. “Whether it's ours that you want to buy, if you do, we want to sell that to you, and we want it to be a product you like. If it's not ours, we want to help you learn how to stream and find what you're looking for.”
Buckeye Broadband offers a program called “Brain and Stream Assist,” that helps its customers consolidate billing, passwords and navigation, according to Shook.
“We have a pay call center that is there to help those that need the help to figure out how to set up their billing and remember their passwords and connect through to the apps that they choose,” he said. “Our positioning is that we've heard from multiple generations that our video consumers wanted choice and control.”
Understanding how their customers consume TV is essential to a better overall experience, regardless of their age, Rankin added.
“The younger generations probably prefer an app-based search experience, and certainly the older demographic, they love the guide and the big remote,” he said.
Rankin pointed to the TiVo Manager app in helping Summit to “marry” those environments.
“TiVo Manager is doing that well for us,” he said. “We can give the grid guide experience and still create that app experience. And it brings deep search capabilities, such that if you are subscribing to Paramount or Netflix or something else, you know your search will present those options to you. And so, so we think that's the best of both worlds right now.”
Tilley summed up the panel’s philosophy by noting the delicate balance small independent operators need to maintain to continue to offer video while keeping an eye on the bottom line.
“We try to keep the price as affordable as possible while covering costs at a small margin,” she said. “That's our philosophy of how we approach video.”
