Downfall of Cable Television Leads to Aggressive Techniques to Retain Customers in the battle of Internet vs. Cable TV 7.26.2010

Insider information sheds light on cable television providers as they recognize a real threat to their bottom line profits from the impact of high speed internet users who can access video on demand without a cable box or monthly subscription fee. Similar to the newspaper, cable television is becoming irrelevant and past tense. The largest providers have recognized this and are using aggressive techniques to retain customers in an attempt to try to stretch the reach of their fading empire.

Customer complaints have included call center agents flat out ignoring cancel of service requests, double billing, and upselling. Employees from two of the largest cable television services are reporting strict guidelines being enforced at their call centers to avoid cancellations and "talk customers into believing cable is the only way to be entertained." Supervisors were telling employees that are honest or agree with the customers that "they may be fired immediately." Their strategies are threefold:

1.) Upsell premium channels by getting the customer to admit they like specific channels or network programming (NASCAR, Disney, etc).
2.) Offer temporary service discounts to try and keep the customer. This might look good, but don't lose long term sight (one employee mentioned his department had offered people a credit as low as $.50 cents to retain them - to which the customer laughed at and hung up).
3.) Tier their channels to appear useful by telling the customer they must pay for extra channels in a "package" even though they only want a specific channel.

Consumers are starting to recognize these techniques and were already on edge because of the sheer amount of excessive commercials and advertisements. Many customers complain that it's becoming harder to find interesting programming on cable television lately. The consensus seems to be "if it weren't for a select few channels on cable; it may have died a long time ago."


Source: ZDNET.
Consider the cost of an average year of basic cable service at $59.99 per month, plus fees and taxes. The damage for this alone comes out to well over $1,100 dollars per year per customer. If you have any additional channels "packages" or "premium" services, your dollar figure could rise well above this amount. There are numerous alternatives that offer services at a fraction of the monthly cost of cable (Converter Box, Hulu, Netflix, PS3, Xbox360, etc). In fact many of the shows, movies, and sports you watch may be available for free. Since we are in a weak economic period it may be time to audit your entertainment costs and do something about it.

A last ditch effort by major cable companies comes from training their call center employees on saying whatever is necessary to keep the customer, even if it's a flat out lie. There are advantages over satellite, cable, and vice versa, but that's irrelevant. The internet is a growing threat to providers and they are starting to panic since they cannot control what you watch, and especially because they can't sell advertising space to your browser. Further, tiering cable channels has become such an effective technique that they force customers to pay for multiple channels when they in reality may only watch one. They know that very few channels bring in the actual cash flow. Since more and more people are setting out to watch their favorite shows online or use services like Netflix, cable TV is in danger of losing their base. Digital video recorders (DVR) were also a last ditch effort to create additional monthly revenue. These boxes were sold to customers on the premise that you could record and playback your favorite shows for a small monthly fee. However, you can also get your favorite shows in high definition online for free. You can even download it directly to your computer for free, convert, play back, and even send to your portable devices such as mp4 players. There is no current advantage to owning a DVR because of the sheer amount of free alternatives.

The saving grace might be high definition programming. There's only one problem with that - it's available for free online too. Alternatives also exist including new technologies like "Netflix Ready Devices" embedded into newer high definition televisions being sold at Best Buy and other retailers. If you have a high definition television and want local channels, you can also get a free converter box, use a small indoor antenna and be able to receive local channels in high definition without paying for cable. This is good for those who may want access to their local ABC, CBS, or FOX affiliate for sports or other prime time programming. Because the nation is in a significant economic crunch, consumers will likely take the route of less cost, free entertainment, and look for any way they can to keep some green in their pockets.

What do you think about cable television? Do you pay for cable? Will you continue to pay for cable or will you find a free alternative?

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