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Telco TV is a Disaster

Imagine spending billions to not only upgrade plant to handle TV streams, but buy/build cable head-ends, negotiate content, test out set-top boxes, train technicians, ramp up advertising and staff call centers for sales and support. Do all of that to catch up with cable (who are eating your profitable lunch in the T1, DSL and POTS business). And after spending the combined billions for U-Verse, FiOS, PRISM, et al — you are still losing subscribers because (a) your broadband pipes are slow; and (b) cord cutting hits its stride.

Now imagine that you are so far behind in voice that cablecos are considered the incumbent!

You watch as ESPN – THE sports channel for decades – loses 3 million subscribers in three years to the tune of $500 million in lost revenue! NBCU (owned by Comcast) is closing channels and re-branding others.

DISH Network launches Sling TV, an over-the-top TV streaming service starting at $20.

Netflix, Hulu and Amazon Prime put out their own quality content. Game over!

I don’t know where TV goes from here because the business model is falling apart. Not only subscriber dollars are declining but advertising dollars fall right alongside.

Newspapers went through this – and are still struggling to find a business model that works. Cablecos knew about this problem five years ago but chose to stick their head in the sand as well. I truly believe ILEC executives have ZERO idea how to compete, so they follow the leader and basically act like a chicken in a yard.

Worse, I read today that in a couple of years, auto companies, which account for 10+% of spending, will likely not have to advertise because of connected cars!

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