Web Excursions 2022-05-19
Cable’s Last Laugh
everything that makes the cable business so compelling:
is in high demand because it provides the means to get what customers most highly value.
works best both technologically and financially when it has a geographic monopoly.
creates demand for new supply; technological advances enable more supply, which creates more demand.
It’s that last bit about satellites being better on lower ground that stands out to me, though:
as long as you control the wires into people’s houses
you can and should be pragmatic about everything else.
Turner realized he could buy programming at local rates,
but sell advertising at national rates
via cable operators eager to feed their customers’ hunger for more stations.
Turner soon launched a cable only channel devoted to nothing but news; he called it the Cable News Network — CNN for short
Consolidation in the provision of cable service proceeded in conjunction with consolidation in the production of content,
an inevitable outcome of the virtuous cycle I noted above:
Cable companies acquired customers who wanted access to content
Studios created content that customers demanded
The more customers that a cable company served, the stronger their negotiating position with content providers;
the more studios and types of content that a content provider controlled the stronger their negotiating position with cable providers.
The end result were a few dominant cable providers (Comcast, Charter, Cox, Altice, Mediacom)
and a few dominant content companies (Disney, Viacom, NBC Universal, Time Warner, Fox),
tussling back-and-forth over a very profitable pie.
Netflix and other streaming services were obviously bad for television
Here, though, cable’s ownership of the wires was an effective hedge:
the same wires that delivered linear TV delivered packet-based Internet content.
the fortunes of cable companies has boomed over the last decade, even as cord-cutting has cut the cable TV business by about a third.
strategic positioning of cable companies, and ignores the industry’s demonstrated ability to adapt to new strategic environments.
When Comcast and Time Warner Cable sold their AWS-1 spectrum to Verizon back in 2011,
they believed at the time that they were walking away from ever becoming facilities-based wireless players.
They therefore viewed it as imperative that the sale come with an MVNO agreement with Verizon to compensate for that forfeiture.
Comcast finally launched Xfinity Mobile in mid-2017.
Charter [which merged with Time Warner Cable, acquiring the latter’s MVNO rights] followed suit a year later…in four short years
if Verizon is going to lose customers to an MVNO, it would surely prefer said MVNO be on their network;
this means that the cable companies have negotiating leverage.
What makes the cable companies such effective MVNOs
cable MVNO customers are far more likely to consume data over WiFi, perhaps because of cable company out-of-home WiFi hot spots.
This could become even more favorable in the future as cable companies build out Citizens Broadband Radio Service (CBRS) service,
particularly in dense areas where cable companies have wires from which to hang CBRS transmitters
one of my arguments was that the traditional cable TV bundle would become primarily anchored on live sports and news,
while most scripted content went to streaming.
That is very much the case today
What was a mistake was insinuating that this was the “end”;
after all, as Jim Barksdale famously observed, the next step after unbundling is bundling.
Six years on and Netflix is in a much different place, not only struggling for new customers but also dealing with elevated churn.
Owning the customer may be less important than simply having more customers,
particularly if those customers are much less likely to churn.
After all, that’s one of the advantages of a bundle:
instead of your streaming service needing to produce compelling content every single month,
you can work as a team to keep customers on board with the bundle.
effective bundles have more disparate content that you are vaguely interested in,
instead of a relatively small amount of focused content that you care about intensely.
The breadth of the cable company bundle, though, is unmatched:
not only might it include streaming services,
but also linear TV; more than that, this is the company selling you Internet access,
and increasingly wireless phone service.
That gives even more latitude for discounts, and perks like no data caps on streamed content, not just at Fhome but also on your phone.
"Disregard the Words"
In 2012, my younger sister (in middle school at the time) tried to describe Snapchat to me.
She told stories about real life workflows instead of marketing one-liners,
just like Apple did in those early iPhone ads
[My sister’s] exemplary use case [for Snapchat] was a moment
that she captured in the airport of a funny looking man who was snoozing in an awkward position.
It’s the type of thing that you want to share with somebody, but its insignificance would make it awkward in a text or status update.
“It’s a way to connect with friends when you don’t really have anything to say.”
Or in my words, if traditional messaging is functional—communicating for a purpose;
“What time do you want to meet for the movie?”—Snapchat is the opposite, whatever that is.
After many years of building and tens of millions of users, Notion now describes itself this way: “Every department’s work. In one tool.”
Stop using these popular labels for the things that you are describing.
The truth of what is happening—what actually exists in the real world underneath—is much more nuanced and complex than these pithy statements.
The nouns and phrases you are relying on are imperfect projections on reality.
Don’t ever forget to disregard the words if you want to truly understand the world around you.
if the words already exist to describe something new then maybe it is not truly that novel after all.
looking back on the last decade or two, the most transformative consumer products—and generational changes in behavior—
have often been the most difficult to describe.
The ones where words escaped us initially.