Eroding the ISP Duopoly
Posted on November 5, 2010
Earlier this year Cable TV industry executives dismissed cord cutting as an urban myth. Yet domestic Pay TV subscribers declined for the first time ever in the June quarter. Early reports indicate another drop in the September quarter. While presently conceding cord cutting may be a reality some industry observers conclude the trend is not a serious threat. They reason the industry’s dominance as a broadband ISP enables pricing flexibility that can avoid adverse financial impact.
Download audio narration to iPod, iPad, and iPhone here.
Presently most consumers have little choice but to get high speed Internet access from either the Cable operator or the local Telco. The two industries have enjoyed a near duopoly on broadband ISP service for decades. Like Pavlov’s dogs, both shall likely try to meet the challenge of cord cutting with a time-proven strategy of bundled pricing.
For example, in Albany (NY) Time Warner Cable raised its Internet-only monthly rate from $50 to $55. But customers choosing both CATV and Internet service are billed only $57. One stock analyst also argues that the Cable-Telco duopoly would enable both industries to move toward usage-based ISP pricing if Pay TV cord cutting continues. He asserts ISPs may have “no choice” as bandwidth intensive video streaming becomes more popular. Read more…
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Learning from Early Adopters
Posted on November 1, 2010
As William Gibson put it, “The future has already arrived; it’s just not evenly distributed.” Despite the undeniable logic that early adopters often lead mass market practices, such people are too often dismissed. Perhaps it’s because we sometimes have too much invested in the status quo. When that’s the case even the most accomplished among us are vulnerable because we prefer to believe what we want to believe.
Download audio narration to iPod, iPad, and iPhone (four minutes)
For example, in March one of the most prominent Cable TV industry stock analysts scorned the threat of cord cutting as an urban myth. Owing to his reputation, Dow Jones picked-up the mantra thereby leading some investors to an invalid assumption. That violates Ken Fisher’s first investment principle which commands us to scrutinize our beliefs in order to identify those we hold to be true that are actually false. Consequently, at the end of the June quarter the number of Pay TV subscribers in the USA declined for the first time in history. Furthermore, early indications from Comcast suggest the number dropped again in the September quarter. Read more…
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