The cable industry has been losing subscribers for various reasons. To fight back and retain a few particular customer segments, MSOs (Multi System Operators) have been experimenting with low-cost programming packages. And they are now rolling out these packages beyond their local beta markets and trial offers, which I’m extremely excited about. It’s a great step in the right direction to make these budget-friendly packages part of MSOs standard offering, so that mainly more budget-conscious subscribers can be retained and hopefully new ones gained.
These video-only packages, offered by MSOs such as Cox Communications and Time Warner provide subscribers access to various expanded basic cable networks such as Discovery Channel, E! and Nickelodeon. Cox Communication’s “TV Economy” package is $34.99/month and Time Warner’s “TV Essentials” is $40/month. Not bad.
From a financial stand-point, it will be interesting to see if these MSO’s churn and acquisition results improve as this attempt to turn around the industry will most likely only retain and acquire customers who are budget-conscious but still care about having the service. On the other hand, I’d imagine that these packages will have no effect on those subscribers who get all their content online.
At SWIRE, we’ve been battling all of these challenges with our cable partners. So, we’re excited to face the marketing challenges of this offering and maximize results.
However, the big question remains: Are subscribers cutting the cord because they don’t want to pay as much for cable? Or are they cutting the cord because they get their content for free online?