Can Charter Turn a Frog Into a Prince?

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Charter intends to revive the damaged Time Warner Cable image and brand in the minds of the customer and investor, which is both a challenge and an opportunity. Charter and Comcast are two of the companies American consumers hate the most. However, the pay-TV industry has begun a complete transformation. In the coming new world, both Charter and Comcast may have a second chance, if they can get past all the damage they caused to their own brand.

For decades, the cable television industry has hurt itself, time and time again, by engaging in bad behavior and failing to care for the customer. Traditionally, all cable competitors seemed to focus on was the investor -- never the consumer. The reason was simple: They had no competition, so why not? They had nothing to lose. Where were their customers going to go? That problem resulted from the way cable television rules originally were set up.

The cable companies were unable to see the future, or understand the self-inflicted damage they would suffer when that future eventually arrived.

The future is now here, and the cable companies are sorry they treated customers badly. They are sorry because they are losing market share. They are sorry because customers hate them -- and they only have themselves to blame.

Competition has been increasing over the last decade. It started with satellite television companies like DirecTV and Dish Network. Then IPTV players like AT&T Uverse, Verizon FiOS and CenturyLink Prism entered the picture and started winning market share. All of their growth came from the cable television companies.

Now AT&T has acquired DirecTV and is offering mobile TV (or wireless TV), ushering in a new era of competition in the pay-TV space. The television experience is changing. Customers no longer have to sit at home to watch live TV. They can watch live TV wirelessly over their smartphones and tablets. This puts extraordinary pressure on traditional cable-TV outlets, large and small.

At the same time, many new competitors -- Netflix, Amazon, Hulu and many others -- are moving in and winning their own slice of the pay-TV pie.

So pay-TV, which used to be one huge pie, is now being carved up into many smaller slices.

I have been briefed by many competitors in the pay-TV space, large and small. One of them is TikiLIVE, which offers television services to non-television providers, such as smaller telephone companies around the U.S. Typically, companies that provide TikiLIVE services to their customers use their own name, which is why you may not have heard of TikiLIVE before, but many customers across the country use it every day.

This is the new and changing world of pay TV that Charter and Comcast face as they lose market share. They are the kings of the shrinking cable television space. They need to update their offerings to customers. They need to repair their relationships with customers. If they do not, they will simply continue to lose market share, year after year.

"Spectrum" is the brand name Charter wants to use to build and grow. Spectrum offers services to Charter, Time Warner Cable and Bright House Network customers. This approach is similar to what Comcast is doing with Xfinity. Charter and Comcast realize their own brand names are damaged, so they are creating a new, friendlier brand.

The big question is this: Can the sleepy and old-fashioned cable television industry that never cared for customers in the past somehow wake up and start to compete successfully? Can the frog turn into a prince?

I see something bubbling, but I don't yet know what will surface. As a wireless analyst and telecom analyst, I think about, write about and talk about the changing industry -- who's winning, who's losing, why and what's next.

I hope Charter can pull a rabbit out of a hat. That would be good for its customers, workers and investors. The next move is yours, Charter.

E-Commerce Times columnist Jeff Kagan is a wireless analyst, telecom analyst, industry analyst, consultant and speaker who has been sharing his colorful perspectives on the changing industry for 25 years. Email him at [email protected]

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