Cablevision Gets Wrist Slap For Misleading Ads > The other MSO's

reply to Rally

Re: The other MSO's

you can't compare cable as a whole to VZ's HD line up. That's just crazy and comparing Apples to Oranges. You have to compare provider to provider. Not Industry to Provider.

reply to Bit
Let's see now...losing a low-margin POTS line to cable vs. getting a fat cash cow video subscriber from cable. I think I'd take that deal.
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Toolmaster of La Grange.

Low margin? Yeah right.

reply to jaw2012
Why are people dropping POTS? POTS' high price along with viable VoIP and cellular competitors. »Verizon To Offer $5 Landline Service Price is why I ditched my POTS service.

We just had a news item this week already claiming Comcast to be the 3rd largest telephone service provider behind Verizon and AT&T while the incumbent telcos continue to lose voice customers.

Cable vs FiOS comparisons differ by market but IMO DBS smokes them both in terms of HD offerings and there is no 'mad rush' to DBS...so people aren't buying in droves based on how many HD channels they get. They buy on promos (eg double+triple play deals). Price is king, not how many HD filler channels you get.

reply to Bit
Yes. Low margin. Basic residential POTS is low margin. So low that business lines have subsidized it for decades. Now cash-cow cable TV subscribers are subsidizing the cable POTS product.

So yeah, if I was Verizon I'd happily lose several $10 a month POTS lines to pick up one $100 video customer.
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Toolmaster of La Grange.

Who said anything about "basic"? You think they're losing $10 line customers to $30 cable VoIP providers? They obviously aren't. They're losing the $50+ caller ID, tons of LD, keep my name out of the phonebook fee, call-forwarding, voicemail, 3-way, bunch of extra feature and calling plan types who can get the same or more service for 1/2 the price from telco competitors or go cellular. Advanced services cost telcos mere pennies to provide while they charge an arm and a leg for it, resulting in people fleeing POTS in droves. I can't think of too many services than have insanely high margins of Caller ID and other telco 'advanced services', except maybe cellular texting charges or cellular per KB bandwidth fees. VOIP competitors simply aren't as greedy as the telco, but make no mistake, telephony is very lucrative, otherwise cable competitors wouldn't be entering that business so agressively.

Meanwhile with your "basic" logic, they're losing a ton of big margin $50 pots customers and picking up a few low margin $50 video customers.

$10 revenue, not consumer cost. This is about margins and one video customer represents a much higher profit over expense ratio than POTS ever is even with $5 Caller ID, etc. And if you think those fees are not coming soon to a cable POTS and VoIP provider near you you're naive. Comcast is already tacking them on here.

But thanks for trying.
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Toolmaster of La Grange.

Conjecture, but thanks for trying.

No, just the truth.

LOL.

Indeed.

reply to Bit
No, he's right.

It's accepted fact that pre-divestiture, long-distance and business subsidized home phone. Post-divestiture we've seen how the low margins cause everyone who tries and become a CLEC to eventually either bow out or become a niche brand.

With POTS the person with a basic phone is a "no margin" customer. The company is making a few pennies off of them a month and it's why you never seen retention bending over backwards to keep them. Those extra charges are the only thing making it profitable for residential phones on a whole.

'VOIP competitors simply aren't as greedy as the telco, but make no mistake, telephony is very lucrative, otherwise cable competitors wouldn't be entering that business so agressively.'

It's not that they're not greedy. It's that they have a lower base cost and they need an edge to get customers. MSO's are entering it not because it's lucrative but because it helps round out their service offerings and allows them another source revenue with minimal infrastructure cost.

The fact that the MSO will spend millions to get into telephony while telcos spend billions to get into video tells you who has the sweeter gig.

reply to Bit
Absolutely not conjecture.

reply to bogey780
Telcos are getting into video because they're losing their voice business. Without another source of revenue they would be extinct.

If video was the end all be all cash cow they would have done it 15 years ago instead of making BA&PA type tax deals while not deploying shit. If it were a money tree they would have taken the financial goodies AND deployed. They only started a few years ago because their voice customer base was evaporating rapidly with the rapid expansion of VOIP, dying dialup, and cheap cellular.

But it doesn't matter...you want to believe that those big bill paying POTS customers weren't a huge profit generator while these $50 video subs are cash cows you go right ahead.

reply to bogey780
Absolutely conjecture. You think all these new FiOS adds are $100 video payers? Hardly. Just like cable, Verizon started triple play promo blitzing and that is where these new adds are coming from and they're no more cash cows that any other discount driven gets are.

reply to Bit
'If video was the end all be all cash cow they would have done it 15 years ago...'

Uhhh...they were.

It failed because the technology couldn't support it.

'But it doesn't matter...you want to believe that those big bill paying POTS customers weren't a huge profit generator while these $50 video subs are cash cows you go right ahead.'

I'm just guessing you don't work in the industry. The low profitability of POTS was the reason why the telecoms lobbied for relaxation of LATA regulations for long distance at the expense of POTS revenues. Everyone who has dealt with any telecom work knows this.

reply to Bit

Re: The other MSO's