As the Internet continues to dissolve all boundaries, it’s common knowledge that traditional cable and satellite TV providers now need to be more creative to compete with a number of increasingly popular cloud-based TV streaming services that can be accessed by anyone, almost anywhere, for usually less money.
This year, a handful of the most successful traditional TV providers in the U.S. have tried, sometimes unsuccessfully, to stay afloat by merging, following a common pattern that’s happening around the globe. Last year the biggest cable company in Japan, Jupiter Telecommunications (J:COM), completed its acquisition of chief rival Japan Cablenet. In France, high-speed broadband cable and Internet service provider Numericable has also grown dramatically by eating up other companies, first by acquiring Valvision in 2013 and then by merging with its top competitor, SFR, last fall to form cable giant Numericable-SFR, a subsidiary of the Netherlands-based company Altice. That merger made Altice the second-largest telecom enterprise in France behind Orange, but its rapid growth isn’t over. According to The New York Times, Altice is now reaching across the Atlantic to claim a share of the fraught U.S. cable market.
But while the Internet infrastructure these traditional telecom giants provide will continue to be useful (at least until Google’s fiber-optic network puts them out of business), it remains to be seen if merely becoming bigger will make them any better at broadcasting TV.
The Halls of Fame and Shame
Offering a superior customer experience can be one of the biggest differentiators in business today, but the cable companies continue to struggle there, too. In fact, one of the world’s biggest cable providers, Comcast, consistently ranks as one of the most reviled companies when it comes to customer satisfaction. This year it earned the dubious distinction of being the number-one company in the Customer Service Hall of Shame, based on research conducted by 24/7 Wall St. and Zogby Analytics.
Now compare that to Amazon, the provider of one of the leading online TV streaming services, which claimed the top spot for actual customer satisfaction, coming in first place in the Customer Service Hall of Fame.
This suggests that traditional cable companies like Comcast have a lot to learn from their online-only competitors. Here are a few things they might want to consider:
1. Make Better Mobile Apps
Earlier this month the American telecom giant AT&T acquired the U.S.’s second-largest TV provider, DirecTV, for $48.5 billion, rounding out AT&T’s own U-verse cable TV service with DirecTV’s satellite services and advanced OTT online-streaming apps. In Singapore, the largest cable company, StarHub, just launched its own streaming application called StarHub Go, which features streaming content from partners such as HBO, A&E Networks, Discovery Networks, and Sony Pictures Television.
In a market suffused by cloud-TV kings Netflix and Amazon Prime—which both arrive in Japan this month, continuing their global expansion—apps like StarHub’s and DirecTV’s are more than just a good idea. They’re a prerequisite for any cable or satellite provider hoping to get on the same playing field as the cloud-based competition. And that’s especially true for traditional TV companies aiming to court Millennials and Gen Zers, who increasingly prefer the convenience of watching online-streaming TV on their laptops, smartphones, and tablets. Otherwise, those Internet-savvy customers will naturally default to choosing Netflix and Amazon, or similar cloud-TV services such as Hulu Plus, Germany’s Watchever, and PlayStation Vue, all of which prioritize TV viewing on mobile devices.
Some cable TV companies have created apps that sync with customers’ cable boxes, allowing them to type search queries into their smartphones rather than tediously hunting and pecking for letters onscreen, one at a time, with their usual TV remote controls. But such apps would, of course, gain a whole new level of utility if they also let customers live-stream the results of those searches on the same smartphone screen.
2. Make Better Use of the Medium
One of the most common ways for Amazon Prime subscribers to stream TV shows and movies is through Amazon’s Kindle Fire HD tablets, which have a unique customer service function called Mayday. If a customer is having trouble with Amazon Instant Video or their Kindle Fire HD, they can press the Mayday button and be instantly connected to a customer service agent over live video. It’s a great way to make the customer experience even more seamless and personalized, and other TV providers would be wise to incorporate similar cloud-based contact center solutions into their own apps.
Comcast announced they’ll be hiring 5,500 more customer service representatives over the next few years, but how many of those agents will be accessible to customers through live onscreen video? Theoretically, this should be just as easy for them as it is for purely cloud-based services, because providing customers with an always-on, always-reliable video connection is the one thing that cable and satellite TV providers do better than their online competitors. They may just need to incorporate microphones into new cable boxes, or make better use of TVs that already include microphones for voice-activated controls.
3. Embrace Optionality
In his 2005 book Mediated, cultural critic Thomas de Zengotita coined the term “optionality” to describe the contemporary consumer’s ideal state, a condition of being surrounded by virtually limitless options of products, services, and experiences to choose from. In the ten years since that book’s publication, it’s only become clearer that giving customers tremendous freedom of choice is one of the surest ways to keep them happy and coming back for more. And it’s something that streaming services like Netflix and Amazon Prime pride themselves on, making thousands of programs available to customers at any given time.
Traditional cable and satellite television providers have attempted to meet this TV customer demand by offering 1,000+ channels and multiple service packages to choose from, but those approaches still involve choosing from entire television networks. They don’t approach the total a la carte optionality available to those who prefer to pick and choose their TV in terms of specific series, or even specific episodes of a series, as users of Amazon Prime or Apple iTunes can do.
In an attempt to reach these selective online viewers, HBO, CBS, and now Showtime have offered direct-to-consumer online subscriptions, bypassing their former dependence on cable and satellite TV companies. It’s a big step in the right direction, and those cable and satellite TV providers need to learn from it before the thousands of other channels they host begin to bypass them as well.