Don’t Make the Voice Mistake with Video

by Bernie Arnason


There is a change happening in the video business. A significant one. It reminds me of the change that happened in the voice business over the past 15 years. During this timeframe, millions of customers gave up their home phone line. So much so, the aggregate number of phone lines in the U.S. is down almost 50% from its high point. A sobering reality if you are in the business of offering home phone service.

Many people mistake what happened with this historic shift. They view it as consumers giving up voice service. When in reality, consumers didn’t do that. They just decided to get voice service in a different way – namely VoIP service from a competing cable company, or cellular voice service from a wireless company. They decided that VoIP and/or wireless created more value for them than their home phone service, so they disconnected it, in favor of one or both of the “new” voice services.

They may have liked the added features and lower bundled cost that cable VoIP service offered. They may have liked the convenience and mobility that wireless voice offered. They may have perceived they were saving money. Or, perhaps, a combination of all of these things.

But the reality is home telephone service providers had just as much opportunity to offer some of these same value propositions for voice service as their cable and wireless competitors did. Home phone service was theirs to lose. Most did not. They offered the same voice service — with few, if any, new features or price discounts — that had been offered for decades. In some ways, they made it easy for consumers to leave.

I would contend the same thing is happening with video. Consumers are seeing many more options and better value propositions from video upstarts, and they are starting to leave (or “cut the cord” as our industry likes to call it). SNL Kagan just reported that 2Q 2015 was the worst quarter ever for cord cutting, with the loss of 625,000 subscribers collectively to cord cutting. In just one quarter. That’s more than all of 2014.

OTT, streaming services, mobile TV and online video (YouTube, etc.) are flooding the market with new and less expensive options than what the traditional cable package offers. In much the same way that voice subscribers voted for new innovative ways of getting voice service and cutting off their home phone service, video customers are now beginning to do the same.

But video providers don’t have to stand still and watch the exodus. They have the ability to innovate and offer many of the same services that their customers are now cutting the cord for. With some research and a little risk taking, today’s traditional video service provider can offer these same services – OTT, streaming video, on-demand video, and mobile TV access, to name a few.

I don’t underestimate the challenges in doing some of these things. It’s certainly not easy. But as was the case with home phone service, video service is yours to lose. You can decide to remain stagnant and not innovate. Or you can choose to innovate and give customers a reason to stay. The choice is yours. Good luck!

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