Cord Cutting is Devastating Comcast...But Will They Be Disrupted or Save Themselves?
Cord Cutting is Devastating Comcast. Will They Be Disrupted or Save Themselves?
Comcast, and other cable companies, are being disrupted by all the online streaming TV offerings and especially DirecTV NOW. Since our family has an AT&T Unlimited Plan, we “cut the cord” with Comcast (plus we’re selling our home and downsizing anyway) and signed up for the DirecTV NOW basic service with HBO added. The total cost is a measly $15 per month.
We also ditched TiVO and their $20 per month DVR pricing so we’re saving well over $100 per month on TV. Yes, we have Netflix, Hulu and a subscription to AcornTV (we love British television) so our total outlay is higher but still under $50 per month.
How could we NOT cut the cord? Especially since DirecTV NOW will soon have a recording capability and a new user interface (sometime this Fall). Our kids are now adults but are classified as Millennials and they, especially, don’t care at all about having cable TV options. They want streaming, on-demand, and binge-watching options and neither of them care about sports options which cable TV companies basically force us all to pay for monthly.
WHY ISN’T COMCAST / XFINITY DOMINATING STREAMING?
Comcast could argue that they are in this space as they provide an Xfinity Stream app. The issue is that this app’s service pricing is not even close to being competitive to other offerings (e.g., SlingTV; DirecTV NOW) and its pricing is almost identical to an Xfinity cable TV subscription.
Those streaming TV “deals” come with the same old cable TV-like pricing games: You sign up for a “first 12 months” — for what appears to be a somewhat competitive price — only to have it jump by 50% after the “deal’s” first term ends. (e.g., in my home area of zip code 55347, a streaming TV app subscription for 140+ channels is $49.99 for the first 12 months but leaps to as much as $75 per month once the term ends AND you are locked in for that entire term).
Offer ends 10/29/17. Restrictions apply. Not available in all areas. New residential customers only. Limited to Digital Starter service. 1-year minimum term agreement required. Early termination fee applies if all XFINITY services are cancelled during the agreement term. Equipment, installation, taxes and fees, including Broadcast TV Fee (up to $8/mo.), Regional Sports Fee (up to $6.50/mo.) and other applicable charges extra, and subject to change during and after the promo. After applicable promo, or if any service is cancelled or downgraded, regular rates apply. Comcast’s monthly service charge for Digital Starter, ranges based on area, from $52.49 to $75.49 (subject to change). Service limited to a single outlet. May not be combined with other offers. Limited Basic Service subscription required to receive other levels of service. On Demand™ selections subject to charge indicated at time of purchase. Not all programming available in all areas. 30-Day Money-Back Guarantee applies to one month’s recurring service charge and standard installation up to $500. Call for restrictions and complete details. ©2017 Comcast. All rights reserved.
So you can see that it’s basically a cable TV subscription but through an app. You also cannot end your cable TV subscription and immediately subscribe through the app (New residential customers only). Also, there will be all sorts of associated fees and taxes — like the “Regional Sports Fee” whether or not you even care about sports — a fee that you do not have to pay with competing services.
My wife and I got sick-and-tired of having to go to the Comcast/Xfinity ‘store’ near our house every six months or otherwise our cable TV subscription would often jump-up by $60 or more. Numerous times over the last decade we’ve suddenly received a Comcast bill that was more than double our “reasonably priced deal” monthly subscription. We refuse to play Comcast’s game so we said goodbye a couple of months ago.
Comcast absolutely could own this streaming TV space but their streaming app subscription is virtually identical in cost to a cable TV subscription, so being competitive (and stopping their game-playing with pricing) means they would have to decimate their own TV business which they’re not likely to do.
Why would Comcast not cannibalize their own cable TV business?
Harvard Business School professor and author Clayton Christensen, wrote a best-selling book called The Innovator’s Dilemma (which The Economist named as one of the six most important books about business ever written). Its premise is that successful, outstanding companies can do everything “right” and yet still lose their market leadership – or even fail – as new, unexpected competitors rise and take over the market (book at Amazon).
The reason Comcast will quite likely lose their leadership (or fail) is because they have so many contracts with TV providers they’d have to unwind, cable TV subscriptions they would lose to cord cutting, and top-line revenue they would have to replace, that it’s probable they will fail.
I, for one, will be happy to say goodbye to the cable TV gaming when it comes to their pricing models (and, hopefully soon, the cable TV company internet-service-provider monopoly, but that’s a topic for another post).
the killer to new customers is that 500 installation fee. In New Zealand there is only one traditional offering beyond the very good free service. This is Sky although Vodafone do resell this via their cable network in a handfull of cities. Monthly fees are higher than yours but installation was free with a 12 month account. I have Sky because I was offered a deal I couldnt refuse of $25 a month which has no force renewal at the end of that term. Ive made no secret of the fact that on day 1 year plus 1 day that service is cancelled. I wont be paying them $70 a month. Also have netflix and amazon prime.
Here Sky is also hemorrhaging customers but they blame pirate downloaders still. 5 years ago that was true but these days illegal downloading has become so hit and miss what with copyright police and malware pretending to be the real file (do music companies write malware?) that most people just get a streaming service.