Prisoners of Cable
Cablevision announced earlier this month that its Optimum Voice has now signed up 250,000 customers, extending its lead as the nation's "fastest-growing facilities-based VoIP service." That kind of progress leads Robert Sachs, the president of the National Cable and Telecommunications Assocation, to declare (sorry, that's just a small excerpt) that by the end of next year, his industry will be the No. 1 provider of VoIP services.
That's not such a daring prediction. The cable MSOs' advantages in the marketplace, especially their reach into subscribers' homes and wallets, is well recognized. But as Andy and others have noted, they've got significant challenges, too. For instance, Cablevision's Optimum Voice is shackled to the customer's physical location. You can't take Optimum Voice with you. Over time, that could become a big disadvantage.
But here's an even bigger challenge for the MSOs: Overcoming their culture of treating customers like prisoners (a relationship that, thanks to the near-monopoly they enjoy for most of their products, actually is built on more than a grain of truth). Several paragraphs down in its Optimum Voice press release December 7, Cablevision notes that the service's standard monthly price will remain at $34.95 for 2005.
So, while its big competitors are cutting prices and trying to deliver more value through new features, Cablevision not only isn't cutting prices now, it's setting the bar for the next 12 months? That's the attitude of a company that either believes it's got its customers so fenced-in they won't stray to competing services or that, through port-blocking or some other kind of hardware or software nonsense or maybe some kind of regulatory interference, it will be able to shut competitors out.
Consumers put up with this treatment for TV service because they really don't have a lot of choice. It's hard to see why anyone would stand for it in voice service when there are so many other places to go.