Strategic Group Map Time Warner Comcast CableSubscriber Base/ Price DirecTV Dish Network ServicesPrice: We choose to use this variable because price is a key component when it comes to thisindustry so much so that Standard & Poor’s has named the stiff competition battle of thebundle’s or bundle wars. The price of cable and broadcasting is also becoming standard and ifanyone goes outside of the normal price range consumers want to make sure they are gettingtheir perceived value. The prices of substitutes are relatively low when you consider Netflixwhich offers their services at $8 a month and Hulu which is only $10 a month. Industry membersmust compete against companies like that by being competitively priced. The arrival of newmediums of entertainment has intensified price competition as well especially with them beingable to offer their services at a lower price. The group map is organized so that from top tobottom it’s higher and lower prices. It also takes into account the amount of pricing options that acompany has as well like bundles/packages and individual services.Subscriber Base: The subscriber base is key to industry members since a vast amount of their revenue isdependent on individual consumers. There are also benefits to having more subscribersaccording to several companies 10-K’s. The benefits are explicitly stated but they relate toprogramming expenses. Industry members are also showing the increased importance inacquiring new customers. This is an important component that can’t be over looked by any
industry members. The key to gaining revenue is by acquiring more subscribers. Industrymembers incorporate a majority of their strategies and services to acquire more subscribers aswell. This is why we choose to use this as a variable. The group map is organized so that fromtop to bottom it will show a company’s subscriber base from high to low.Services: We choose to use services as a variable because this can help differentiated industrymembers from the competition. The variety of services offered can help create a competitiveadvantage for companies. For instance DirecTV offers an NFL service package to subscribers atno charge. Comcast has Xfinity TV a web portal online that allows its subscribers to access theircontent online. Consumers want the best services especially with free and cheap substitutesavailable. The more services offered and the most innovative services will allow companies tostay ahead of competitors. Industry members just can’t rely on offering consumers expectedservices but, must go above and beyond what the consumer can get some another company. Thegroup map characteristics from left to right are based on the amount of services. The amount ofnew and innovative services is also taken into account as well. Time Warner Cable Price Time Warner Cable recognizes the importance of price according to their 10-K. Theymention that with competitors offering small and inexpensive prices it’s made pricingpromotions more aggressive. TWC offers its services on a tiered level which allows them to offercompetitive prices to consumers. Their video service offers Basic, expanded basic and digitalbasic subscribers and increase in price from left to right. Subscribers are also able to purchaseadditional or premium services as well. This allows them to offer their cheapest service and stillmake money off of subscribers because of add-on services at a low cost to subscribers. Theirbroadband services has the same tiered model but, with 4 levels at different speeds at differentmonthly rates. They are also one of the few competitors who offer individual services to theircustomers as well but, they are more expensive. The prices listed below aren’t definitive asprices do vary from location to location and there isn’t information on how price is determinedfor each region. Time Warner cable is definitely one of the most expensive industry memberswhich is why they are positioned higher than all the other companies on the group map.TV $49.95/monthPhone $39.95/monthHigh Speed Internet $34.95/month
Subscriber Base Time Warner cable and industry members are not only attempting to increase their revenue but, their subscriber base. Time Warner Cable has done several things to increase their subscriber base one being improving their customer service. Their customer service satisfaction increased by 3.4% in 2011. TWC is the 2nd largest cable provider in the U.S market with 12.8 million subscribers which lags behind Comcast. Despite that fact they do continue to defend their market share and maintain a high subscriber base. Time Warner Cable controls 15% of the market share in the U.S Market. They are positioned more towards the middle because although they don’t have the highest number of subscribers they are on par with other industry members. Selected subscriber-related statistics were as follows (in thousands): December 31, 2010 2009 % ChangeReResidential video(a)(b) 12,257 12,699 (3.5)%C Commercial video(b) 165 160 3.1 % Residential high-speed data(c)(d) 9,469 8,994 5.3 % Commercial high-speed data(a)(c)(d) 334 295 13.2 % Residential Digital Phone(d)(e) 4,385 4,153 5.6 % Commercial Digital Phone(a)(d)(e) 111 67 65.7 % Primary service units(a)(f) 26,721 26,368 1.3 % Customer relationships(a)(g) 14,496 14,572 (0.5) % Double play(a)(h) 4,866 4,900 (0.7)% Triple play(a)(i) 3,680 3,448 6.7 % Services Time Warner cable must continue to innovate and offer diverse services. They have continued to improve their customer care services by introducing SignatureService which is a specialized customer service feature. They also offer online services by offering things like eCare and MyService to allow customer to get 24/7 customer service and avoid repeated trouble calls as well. Time Warner Cable offers about the same amount of services when compared to competitors products and services section on 10-K’s. They may offer the same number of services but that is not a reflection of innovative new services. They are one of the few companies to offer wireless capabilities to their subscribers. TWC has lagged behind the competition by not being truly innovative in its services. The service that TWC does have isn’t anything new from their competitors so they have simply copied other companies new service innovations. This is why they are positioned more towards the middle of the the group map because they offer the same amount of services that are expected from industry members and nothing really to set them apart.
Dish Network PriceDish network offers a variety of pricing options and packages to consumers. According to their10-K they claim to have been historically viewed as a low cost provider. They also mention thatthey seek to offer the lowest prices after promotional periods have expired. Dish network alsomentions how one of their primary business strategies is offering consumers great value. One ofthe promotions they have going on at the moment is when you buy a package you can lock inthat price until 2013. There are a list of packages they offer below with their prices listed next tothem. They are positioned on the group map because of their lower prices and packages that arecompetitively priced when compared with other industry members. Dish Network offersconsumers a great value for any consumers budgets which is why they are positioned lower onthe group map.Dish Family $19.99/MonthAmerica’s Top 120 $29.99/MonthAmerica’s Top 120 Plus $34.99/MonthAmerica’s Top 200 $39.99/MonthAmerica’s Top 250 $44.99/Month Subscriber BaseRevenue is primarily derived from subscribers than any other source. One of their businessstrategies is to have outstanding customer service so that they can and will increase customerretention According to their 10-K as of December 31, 2009, they had approximately 14.100million DISH Network subscribers compared to approximately 13.678 million subscribers atDecember 31, 2008, an increase of 3.1%. During that same period they were able to increasetheir total revenue for the year. Dish network has been able to increase their subscriber base forthe past 3 years (2007-2009). Even though they have more subscribers than Time Warner Cablethey don’t have the same market share and receive as much in terms of revenue. They arepositioned more towards the middle on the group map because they don’t necessarily have ahuge subscriber base when compared to its competitors but they are on par with other industrymembers. Services Dish Network does offer the same standardized services expected from industry membersbut, does differentiate itself with some other services. They offer remote access with their DVRservice that allows consumers to control their DVR with Smartphone, tablet and laptop devices.Google TV is also an innovative service that Dish network offers that allows subscribers to do avariety of internet based things while watching TV. Blockbuster movie pass is something newthat they are offering subscribers and is suppose to rival Netflix. Dish Network also has the NFLSunday ticket service that allows subscribers access to a vast amount of football games. They
also offer the same service for different sports depending on which sport is in season. Dishnetwork has been able to not only give subscribers what they would expect but, offers somethingnew and fresh. They are positioned more towards the right end of the group map because theyhave offered innovative and new services. DirecTV PriceDirecTV is one of the few companies that don’t mention anything about its prices on their 10-K.Despite that fact DirecTv is has been competitively priced when compared to some of the majorplayers like Comcast or Time Warner Cable. Their Packages can be compared with DishNetwork especially when it comes to their pricing models. This is why they are so close whenyou look at the group map above. They also have Spanish and English packages as well atdifferent prices as well. There is a table below with more price information English Package Spanish PackageChoice $29.99/Month $22.00/MonthChoice Extra $34.99/Month $29.99/MonthChoice Ultimate $39.99/Month $39.99/MonthPremier $83.99/Month $94.99/Month Subscriber BaseDirecTV is one of the few industry members involved in other markets other than the U.S. Theyhave operations in Latin America according to their annual report they have 8.9 millionsubscribers. In the U.S market they have an approximately 19.2million subscriber which is thecloset subscriber base to Comcast. They are closer towards the top because they operateinternationally and their subscriber base is the only one that is comparable to Comcast’s’subscriber base.
ServicesThe notion “Don’t just watch TV DirecTV.” is truly emphasized in the services they offersubscribers. They don’t just offer the standard services expected from industry members but, goabove that and truly please their customers. They offer a lot of international packages which issomething unique to their company because they go beyond the usual Spanish package. Theyhave a variety of packages for consumers who speak Brazilian, Cantonese and Mandarin amongothers. They also offer the Whole DVR home service that allows their subscribers towatch/record from any room in the house. They also distinguish themselves with a better movieselection than their competitors so although they offer the same VOD service as competitors theselection and variety has been improved upon to enhance the customer’s experience. Theservices they do provide closely mirror those of Dish Network which is why they are positionedso close to each other but, they have distinguished themselves with some services. This is whythey are closer to the right of the group map Comcast PriceComcast has very competitive prices especially since they are one of the few industry membersthat offer individual services. There individualized services are also priced competitivelyespecially when it comes to their TV services. There TV service can be compared to DishNetwork/DirecTV especially when you look at their prices. They also offer a variety of prices fornew customers and their current subscribers. Comcast also offers special prices for onlinecustomers. They are positioned a little more towards to the top because they offer a lot of price
variety but they aren’t the cheapest among industry members. They are the most competitivelypriced when compared to other industry members. TV Services High Speed Internet VoiceDigital Starter----$29.99/Month Performance---$29.99/Month Unlimited---$29.99/MonthDigital Preferred----$39.99/Month Blast Extra---$39.99/Month Local with more---$34.95/MonthDigital Premier---$84.99/Month Subscriber BaseComcast easily has the highest the most subscribers in the industry which is an amazing featwhen you consider they operate mainly in the U.S market. In 2010 Comcast was able to increasetheir total subscription base by 1.3 million subscribers. Comcast has continued to increase theirsubscription base continually and has the largest subscription base. Competitors don’t comeclose to Comcast’s subscription base. Just one of their segments accounts for another companiestotal subscription base.Video Customers 22.8 MillionHigh Speed Internet Customers 17 MillionInternet Customers 8.6 Million ServicesComcast is the most innovative industry member and continues to offer some of the best and newservices to consumers. Xfinity TV is something that has changed the industry for a variety ofcompanies. Xfinity TV allows subscribers to see movies the same day as DVD releases. It alsoallows them to watch entire seasons of certain TV shows. Comcast also offers On Demandpackages along with the content they already offer with Xfinity TV. Comcast also is the onlycompany that offers internet security with their internet service as well. Comcast among anythingelse not only has a variety of services but they offer the most dynamic and innovative services tosubscribers. This is they are positioned to the furthest right because they offer the most servicesand the most innovative services as well.