News

Innovating With Growth In Mind

6/21/2010 4:26 PM Eastern

It’s been said that innovation
distinguishes between
a leader and a follower.
Technology players should
take note.

The cable communications
industry is especially ripe for
the next wave of innovation.
Cable providers’ biggest strategic
challenge has always been
in earning a good return on
the capital required for building
networks.

For decades, premium programming
options and local
advertising generated steady
growth. As Internet and telecom
companies entered the industry,
the landscape vastly expanded
and competition increased,
as service providers evolved
from simple video and entertainment
providers to fullservice communications
purveyors.

With this increased competition, cable companies
now find themselves asking:
“What’s next? Faster Internet?
3DTV? Home networking?
Which product and service
innovations will create sustainable
growth and real differentiation
from satellite and
legacy telecommunications
providers?”

Some communications
companies rely on superior
technology to drive
innovation. But that doesn’t
always translate to a huge customer
benefit. Cable providers
should examine retooling
their approach to innovation,
so that it’s geared to consumer
wants and needs, rather than
just technology alone.

There’s good reason for cable
providers to be concerned
about putting customers at the
center of their business plans.
Accenture research shows that
nearly 30% of telecom business
customers consider switching
providers because they are dissatisfied with customer service.
Customers can be finicky, and
brand loyalty is hard to come
by in today’s increasingly competitive
landscape.

Cable companies should
consider a more balanced approach.
They must invest strategically,
managing costs while
serving customers through
more lower-cost, self-service
channels, such as Web-based
services. This will help create
opportunities to pursue operational
efficiency and grow
revenue.

To revitalize their fortunes,
cable providers have been
forced to shift their view of the
entire TV experience by merging
TV to the Internet. One
major player will soon allow
partners to create new applications
— called widgets — that
will run through the company’s
cable box to consumers’
televisions.

Others are exploring mergers
and acquisitions to evolve
from traditional cable service
providers to media creators.

Some are examining new
services — such as home security,
in-home technology
support, medical monitoring,
etc. — that bear little relation
to traditional entertainment
provision.

For too many firms, investment
dollars aren’t directly
tied to growth opportunities.
Cable companies typically invest
primarily in the physical
network, which is being commoditized,
followed by new
products. There is less investment
in new channels and
routes to market, online capabilities,
customer interactions
and innovative campaigns.
However, primary innovators
are investing heavily in building
and managing distribution
channels, improving customer
relationships and managing
the supply chain.

For cable companies,
there are new, untapped
markets, such as in-home
networking and monitoring,
“on-the-go” entertainment or
the small business/commercial
market. Some cable communications
providers are
now offering their customers
advertising-free, interactive
capabilities that can be used
to book vacations via TV — a
great example of marrying
customer service with innovation,
always a winning
combination.

Customer-centric innovat
ion is a clear-cut formula:
“Slim down,” enhance efficiency,
strategical ly invest
in research and development,
and ensure a positive
and personal customer experience.

Those who embrace this formula
will emerge as industry
champions. Those that don’t
risk being left behind.


Manny Mehta is cable industry
account lead, North America,
Communications and High
Tech group at Accenture.
September