Phone Companies Want To Offer More Entertainment Options--Perhaps They Should Offer Less

With their own set of business growth problems, telephone companies in the end would like you to buy fiber-optic-based video digital services, giving consumers thousand more channels than cable operators presently offer.

But is it the Lint and Dust Channel that they want to watch? Perhaps they really need the Meat and Potatoes Channel.

Companies like Verizon Communications and SBC Communications are buying into the sky-high optimism that if you give consumers even more choice they'll abandon most of the cable operators who presently feed most of the U.S.'s video appetite.

A long New York Timesstory sets out Verizon and SBC's problems: Both are losing landline business revenues by 4 percent a year. Needing other places to grow, what better type of company to morph into than a cable company--a similar-looking, utility-like company for the consumer.

Verizon and SBC dwarf even the biggest cable operator, Comcast Corp., in terms of revenue. But that alone doesn't give the company any better reach into cable's pockets--not with satellite distribution and Internet-based video services also competing for the same monthly video dollar.



Right now if both phone companies' video packages were instantly available to all U.S. TV homes, they would be serious competitors for most consumers' monthly bills. But the reality is that their full business model is years--or a decade away--from having any effect.

And we know what happens with technology and business in just two to three years--everything changes. No one predicts the future too well.

Back in the late '90s when the telephone companies last tried a foray into programming, they quickly abandoned the effort, due to overly optimistic financial projections. At the beginning of 2000, we believed Internet-based companies would instantly take over the video business. But that didn't happen the way analysts thought, and now it's looking like the Internet will become a supplement to existing video distribution.

So here's something phone companies should consider to avoid becoming another VH1 "Behind the Music" (make that "Behind the Video" ) story: Maybe consumers don't want thousands more entertainment options and instead want less--and better--entertainment.

Give us more meat and less dust.

Next story loading loading..