For a long time, cable companies have been sitting in a super comfort cushion chair exploiting outrageous profits from selling services from TV, to Internet, and phone. However, the world has changed but, due to the oligopoly in the cable industry, they are still living in their boxes grabbing huge cash from their customers. To be fair that we do concur that there is a segment for landline services but, really, that slice of pie is extremely small since everyone has a smartphone (well, a computer to be exact) in his/her pocket at all times. So, do we really need any services from cable companies? Or, they are just bad tempered kids spoiled (and protected)b y the authorities (regulators and government)?
TV Service v.s Video Streaming Services
There is no doubt that Americans love TV and the very core of the cable services is the TV broadcast service. It have been their cash cow for … well… forever. However, technology really pushed this angle to a new front where consumers love tv/videos/films still but consumers are enjoying from a totally different facade – “Video on-demand” services.
Netflix has reached most of the households in North America. According studies, Americans spent 2 hours per day consuming Netflix contents in 2017. 80% of the Internet usage in the United States from 8pm to midnight are being used by Netflix streaming service. That’s how dominate Netflix is and that’s how technology has changed consumers TV watching behavior from passively waiting for the contents to proactively searching for the contents. Also, regular TV episodes are fading and being replaced by the seasonal release pattern. Consumers no longer value the service that they can watch tv episodes right when they first air out (excepts sports events but, thanks to the Internet and smart devices, consumers have other much better choices); instead, they would like to have the ability to choose when they can enjoy contents of their choice. Why? The reason is apparent that TV isn’t competing with traditional activities anymore. TV is competing with all the Internet activities such as Facebook, snapchat, twitter, and Youtube… etc. Just think of that if you have 24 hours and you have so many fun choice, will you be willing to sit and wait for the TV contents to be delivered to you at a given time? Or, you would choose a service which provides you the most flexibility to savor tv/videos/films contents whenever you have time and want to do so?
80% of the Internet usage in the United States from 8pm to midnight are being used by Netflix streaming service.
A friend of ours about a week ago was trying to subscribe HBO NOW service because he would like to watch the new season of the “Western World” that he heard the new season is on HBO platform already. However, he did not know that it’s a TV service like airing-program which means that HBO airs each single episode out whenever it’s ready. Therefore, on the HBO NOW platform, he can only watch the new season one by one whenever that episode is available (at the time, there was only one episode). He immediately cancelled the service since he would like to watch the whole season when the entire season is available.
The on-demand video streaming service has changed our tv content consuming behavior entirely. We don’t want to watch single episode because when we allocate our time on TV consuming activities that also means we have time to watch more than one episode and that’s what we want.
Landline vs. VoIP
Do you remember when was the last time you used a landline to place a phone call?
Well, we are talking about making phone calls from your home not from your work place. We understand that businesses still can save big (in some scenarios) from those cable companies phone line services but, for consumers, there is really no need to have any landline at home. Smartphones are all we need and want especially we don’t even need to pay a dime even when we contact people in another continent. The whole phone service has changed from analog to digital already. The transition has been done even on the landline service too(majority part of the process has been integrated into the digital procedure already).
The matter of the fact is that US wireless carriers has stopped charging consumers by minutes of talks and the numbers of texts they send. The data usage is the measurement to determine how much you need to pay for the service per month. The Voice over Internet Protocol implementation has changed the whole world on the way of communication among human beings. Want to talk to your clients in Europe? No problem. Pull out your smartphone and tap on the Skype icon then, voila, not only audio calls but video calls would be initiated in no time. Want to Facetime your parents thousands of miles away? No problem. Pick up your iPhone and tap on the Facetime icon then, voila, your parents would start talking to you just like they are in front of you in person. Better that you can even play games while you are on the video calls with your friends and families.
In about another 10 years, the vocabulary – “phone” – might become obsolete from the dictionary since the communication has parted away from the phase itself. We are in a brand new era that we don’t call phones “phones” anymore. We use those messaging/communication apps’ names as a verb to initiate our actions of contacting intended recipients. We say, “facetime mom”, “skype Tom”, “Line grandma”, “Snapchat Jean”… etc. Still try to stuff the phone service to consumers? It’s a really arrogant, lame, and apparent monopoly move from cable companies.
Still try to stuff the phone service to consumers? It’s a really arrogant, lame, and apparent monopoly move from cable companies.
Home Internet – Need? Want? Or Neither?
This is really a laughable question to ask in some countries. If you ever travel to any of the developed Asian countries such as South Korea, Hong-kong, or Taiwan, you will rarely see any households paying home wifi service at all. The home wifi market had disappeared about 3 years ago in those countries. Why? There is really no need to ask this question because we all know why… we just don’t understand why Americans still need to pay two separate bills for the same service being disguised to be two different products. It’s confusing, isn’t it? Well, what does the Home wifi actually do? Underneath the hood, it’s a service to get us to connect to the Internet. So, what is our wireless carriers’ network do? To connect us to the Internet as well. Then why can we just use our mobile network to connect our devices to the Internet at home?
why can we just use our mobile network to connect our devices to the Internet at home?
We know that there are so many explanations (we call those – “excuses” or explanations for businesses to exploit profits from consumers for something they already are paying) such as network congestions. But, it’s that really the case? Can you really explain that what South Korean, Hong-Kong, and Taiwan can do but United States can NOT?
Some households still purchase home wifi services in those countries we mentioned above but for apparently different services. The Internet speed is drastically different from mobile network. For instance, the home wifi speed in South Korean is about 1GB up and down for about $30 USD per month (from a study about 3 years ago). So … think about how much we do pay per month for what kind of speed we get… it’s pathetic really…
Competitions Drive Innovation But Not in Cable Industry
Again, it’s protected and it’s a oligopoly industry. Building the Internet infrastructure isn’t (wasn’t) easy; therefore, government has been handing incentives to private companies to get them into forging the backbone of the modern America. The result… “Oligopoly” to the least.
In addition, it’s been a big boy’s game. There aren’t real competitions in this industry. What we have been seeing is acquisitions benefiting both parties among those big boys. The consumers usually ended up losing since the service options become fewer and fewer, existing players are able to manipulate market increasing their bottom lines. Just think the recent case of Sperctrum purchased Time Warner Cable. The service is still horrible but the price has gone up since the acquisition.
It’s pretty simple but hard to achieve since, again, it’s oligopoly industry and it’s a super lucrative business… there is no way those players will surrender without a fight. They will still try hard to dump those unwanted services on us. For those service we need (since wireless carriers cannot fill the void), we will be only getting subpar services but paying comparably higher price. The only way things will change and consumers will be standing on the upwind is a totally new innovation to change the way we consume the data either it’s iterating from the existing technology/infrastructure or being created from the thin air. Unless that happens, US consumers really have no choice but paying for whatever amounts those cable companies ask. Well… at least, we are able to say no to the phone service. For the Internet, we should just pray and hope for the changes to come.
Google has been trying to build the fiber network to upgrade consumers’ choices.
Moreover, there are some movements including bringing public wifi to the light (e.g., wifi balloons or, even through the satellites). However, to us, the best and ultimate (and fastest changes) solution is still via the mobile network which has been increasing both the speed and capacity at an exponential rate. Remember that 10MB up and down was considered to be a high speed network about 5 years ago. Now we are talking potentially over 500MB up and down on the 5G network. Sadly, the cable companies are way behind (by choice we suspect). The most common product offerings from them are about 50MB (up and down). Guess what? Some of them are still offering 1.5MB, 7MB, or 15MB (up and down) and, laughably, they call those plans “high speed” Internet plans.