US cable ‘needs to change’ to meet threat

Cable TV is a ‘legacy model’ that is ‘under threat’ and US cablers need to change the way they offer TV services, according to new research.

US mobile technology company Marchex analysed data from over a million calls to to US cable companies to shed light on what consumers are willing to pay for.

Noting that “the way Americans pay for TV programs is undergoing a massive shift”, Marchex said that 26% of new customers asked for Internet services only. That compares with 22% that asked for TV only.

Among the TV requests, 40% of customers requested specific channels, which led Marchex to conclude suggests that “consumers want more freedom and flexibility to cherry pick content”.

About half of the people asking about TV channels wanted premium services, with HBO the most requested service. In the sports sector, ESPN was by some distance the most-requested channel.

“Cable companies are coming face-to-face with the threat of disruption. Our data shows that providers need to start addressing pressing consumer demands; otherwise, they risk losing real market share when people decide to cut the cord for good,” said Chen Zhao, director of analytics for the Marchex Institute, the data and insights division at Marchex.

He added: “While the vast majority of consumers today remain traditional cable subscribers, industry data and Marchex’s findings confirm that the cable industry is a legacy model under threat of new and disruptive services.”

Estimates vary as to the cost to the cable companies of cord-cutting and cord shaving, but some analysts have suggested the rate of decline in pay TV subs is slowing and that the actual revenue per user is on the up.