January 21, 2013
Breaking Up the Bundle: Consumers Look to Ditch the Triple Play
By Tara Seals, TMCnet Contributor
Voice, data and broadband: selling a bundle of the golden triangle of home communications services has long been the established model for cable to minimize churn and lock in attractive monthly average revenues per user (ARPU). And with ARPU for triple-play packages across pay-TV operators hovering around the $100 mark with introductory pricing, and escalating upward with regular pricing, it’s been a sort of “set it and forget it” strategy that has worked well as a cash cow for residential services giants—so far.
However, there is trouble in paradise. Consumers are increasingly looking to save money on cable, phone and Internet bills as a matter of course—ubiquitous Vonage (News - Alert) commercials lauding the freedom of cheap over-the-top VoIP is one indicator of that. The fact that cable MSOs are continually losing basic video subscribers to IPTV and satellite quarter-after-quarter is another. As we hit 2013, consumers are trying to take more control over their communications costs, and the fact is, there’s plenty of room for them to do so.
Promotional pricing for the triple play is the bait that most residential triple-play customers have been happy to swallow. Getting a free year of a sought-after sports premium package, or reduced top-tier broadband for six months, are effective carrots. Then when regular pricing kicks in, it’s either too much of a hassle or too time-consuming for many end-users to bother canceling services, shopping around or negotiating with their provider... Read More