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Is It Time to Rename the Cable Industry?

February 26, 2015 by John Ward 0

Have you noticed that the cable industry is changing? Last summer, for example, the Leichtman Research Group reported that the top U.S. cable providers now have more broadband subscribers than cable TV subscribers.

Marcus Wohlsen at WIRED magazine reacted to the news by writing, “You can’t call them ‘cable companies’ anymore . . . [the] figures suggest the industry is now misnamed. Evidently these are broadband companies that offer cable on the side.”

Wohlsen makes a valid point.

Many of the largest cable companies are in reality multi-dimensional service providers. And the list of services has grown in recent years. Look at the number of cable companies that now offer home security and automation solutions as part of their portfolios.

Cox Communications is a Perfect Example

Atlanta-based Cox Communications is a perfect example of this diversification.

Cox is the third-largest cable company in the United States, serving more than 6 million total subscribers in about 18 states. As you would expect, Cox has a number of TV subscription plans with different options based on sports, movies, and premium networks.

But the company also offers a variety of high-speed Internet packages, digital telephone, and specialized commercial services – many of which are specifically designed for small to mid-sized businesses.

Cox is in the home security business too (and, as a result, is tapping into a global home automation market that could, according to some sources, exceed US$21 billion in 2020). Cox subscribers can use these solutions, for example, to remotely view live video of their homes or control thermostats and lighting from their smartphones.

Analytics, Not Guesswork, is Driving the Business

Multiple revenue streams and new business ventures seem like the right strategy for cable companies – especially as Internet streaming services such as Netflix, hulu.com, and Amazon.com now offer consumers new alternatives for pay-TV content.

But how are cable companies effectively managing their various offerings? It’s not by guesswork or a Ouija board.

At Cox Communications, a central analytics team uses predictive analytics to help decide which combinations of its products are right for certain customers. By evaluating subscriber data from across the company’s 28 discreet regions, Cox can create personalized offers for consumers while identifying customer-related issues that include propensity to purchase, likelihood of churn, and prospective credit risks.

The team builds specific predictive models around customer acquisitions, retention, lifetime valuation, and event-based marketing. These models can quickly poll some 10 million observations and employ up to 800 different variables.

The analysis is extensive. Cox analysts create more than 1,600 predictive models a year.

The Internet of Everyday Life

Undoubtedly, this kind of customer research and analytics will help the cable industry as a whole identify future directions. And the relatively recent foray into home security and automation may be an indicator of things to come.

With the ability to connect smart devices and the proliferation of components such as low-cost cameras and sensors, the so-called Internet of Things is quickly becoming the Internet of Everyday Life. These technologies are moving from the consumer electronics’ show floor to the family kitchen and minivan. These days, you can check on Whiskers while you’re at work or fire up the crockpot from your smartphone.

It seems only logical that Internet service providers will continue to play a major role in enabling our increasingly hyper-connected world.

But enough of the future.

If companies like Cox Communications are already more than just cable TV providers, what is the right name for the industry?

Join me on Twitter at @JohnGWard3.
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This story originally appeared on SAP Business Trends.
Photo: Shutterstock

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