DALLAS – A U.S. report released this week says "there are a sufficient number of ambivalent or dissatisfied cable and DBS subscribers that a competitive offering with even slight cost advantages could be disruptive to the market balance."
The report, by The Diffusion Group, predicts that with the right marketing, the television service offered by traditional telcos could gain 25% of a given market within two years of launch.
(It’s already happened in Winnipeg, for example.)
"Some 84% of U.S. households now subscribe to some form of pay TV service, be it cable or satellite," said Dale Gilliam of The Diffusion Group. "However, 15% of these subscribers are dissatisfied with the quality of their current service, and 22% are likely to switch from their current service to a TelcoTV service given some level of cost discount."
"The U.S. pay TV market has evolved to a level of maturity where penetration is stable and growth is contingent upon increasing per-subscriber revenue," said Michael Greeson, CEO of The Diffusion Group and co-author of the report. "There seems to be tacit consent among cable and DBS operators that current average prices are sustainable, as are price increases for basic services. This is a perfect environment for a new player, in this case TelcoTV, to enter the fray."
As U.S. telcos construct responses to cable’s ‘triple-play’ threat, they have realized that the lynch-pin service is video – it is by far the most sticky and churn-resistant service of the bundle, says the report, which features the results of an April 2006 study of more than 1,500 U.S. households regarding awareness of and interest in TV and bundled services offered from their ‘local telephone provider.’
