CABLE OPERATORS WILL MODIFY their marketing strategies in 2008 in order to place more emphasis on household savings rather than cool new features, says a new forecast by research firm Pike & Fischer.
This change in strategy will occur as U.S. households worry more about the dwindling value of their homes and scale back spending on such items as home entertainment.
Cable operators, for example, will start offering economy tiers of high-speed Internet service for cost-conscious consumers who are satisfied with less bandwidth than what standard cable service delivers and who might otherwise buy lower-priced digital subscriber line (DSL) service, says the P&F report.
And thanks to that pricing, American cable operators are also likely to see their base of digital phone subscribers grow as more and more consumers drop traditional telephone services for cable’s monthly flat-rate plans and discounts, the research firm anticipates.
Top cable operators will lose about 200,000 basic video subscribers in 2008, but will more than offset that with the addition of 4.5 million new telephone customers and 4.6 million new high-speed Internet subscribers, the report predicts.
"But cable companies will also have to increase their spending on bandwidth enhancement efforts to offer more high-definition video and faster Internet speeds," said Scott Sleek, P&F’s director of broadband advisory services, in a release. "They need to compete with the super-fast Internet speeds being delivered by telephone companies over fiber-optic lines, and the expanding menu of HD channels coming from the satellite TV providers."
