IPTV Business Tactics

Filed in archive IPTV on May 11, 2005

The upcoming competition between cable companies and telco's is well documented. The cable companies are offering telephone services (VoIP) and the telco's are offering television (IPTV). One thing that remains to be seen is whether the telephone giants will gain traction in that battle. So, today, I wish to comment about a specific tactic that I find questionable.

Let's lay out the basics:

The logical customer base for the telco's are the existing cable customers. They are 70% of all U.S. television households and already pay something for the privilege of watching TV.

Cable subscribers are not the happiest lot and they may listen to a new option.

The largest group of dissatisfied cable subscribers probably has to be Adelphia's -- the 7th largest. The Rigas family ownership disintegrated a while ago, capital outlays for improvements almost non-existent, the MSO being run through bankruptcy, and a just completed deal to be acquired by Comcast and Time Warner.

While Adelphia is spread out throughout the country, their largest concentrations are in Buffalo, Cleveland, and Los Angeles.

So, where does SBC Communications wish to make its first test of IPTV? In Texas! Time Warner Cable has some pretty button downed operations throughout the state and customer satisfaction there is not low. A highly ranked Time Warner exec told me that Verizon was going to test IPTV in Orlando -- another well run cable television market for cable.

My two cents is this: if you are going to enter into a bruising battle for television households, start where the lowest hanging fruit is. Do not hit the enemy where they are strong.