Not to say I told you so, but the using the word "cable" to describe the industry cable created has to stop. As I noted last month, plenty of folks have come to consider "cable" a pejorative. This is not a good thing for the business. Perhaps of even more importance, "cable" now has a whole lot of competition as AT&T and Verizon and plenty of smaller companies (probably soon to include a T-Mobile/Sprint combo) offer ISP services, including video, voice and data.
That competition is going to get even stiffer as the various telcos (a word just as outdated as "cable," but that's another story) are poised to jump into the 5G business sometime across the next decade. This means more internet choice for everyone … even in some rural areas (density will still rule economic decisions). The advent of 5G services, essentially cellular and fixed wireless on steroids, will set us up for some very interesting battles between the wired (sort of) and the unwired (also sort of).
Of course, with kudos to all the relevant execs, cable has been changing, and changing fast, to keep up with the times. (Cable technicians now show up on time! They're actually pretty nice to deal with, too.) But really, both the big players and the folks represented by the American Cable Association (ACA) and the National Cable Television Cooperative (NCTC) -- you know, the so-called small-system universe of players who haven’t yet sold out -- have added a plethora of services and savvy to their business plans. This has been a very good thing for many bottom lines, not to mention happy customers.
Meanwhile the whole ecosystem, which increasingly includes both infrastructure and content, has to contend with the FAANGs. They pretty much just ride over everyone else’s infrastructure assets. This has not gone unnoticed on the Street. Thus, MSCI and Standard & Poor’s Dow Jones Indices -- the companies that make these esoteric category determinations -- decided to act. How? Well, just for starters, they're reclassifying everyone. As of September 28 the sectors formerly known as the Telecoms, the Consumer Discretionary Sector, the Media, the Internet and Direct Marketing Retail sub-industry and the Information Technology will disappear! In their stead will be the brand new “Communication Services” sector which will pretty much rule the market accounting for about 10 percent of its value … not to mention about half of this year's NASDAQ gain. (Thank, or fear, the FAANGs for that.) You can see how S&P Dow Jones puts it here. And here’s how Business Insider described the changes.
The rationale for all this is obvious: Alphabet, AT&T, Comcast, Facebook, Netflix and Verizon belong under the same umbrella today … and they ain’t the only ones. Still, I gotta admit that I find “Communications Services” one lame name for such a vibrant and important sector.
Not that anyone on the Street will listen but my vote would go to "MediaNexus" because the ISPs real service and main business is connecting a consumer to the internet via broadband. Exclusive content will become the competitive weapon of choice and belongs in that category, too.
Today, almost all media is digital … or soon will be. And media isn’t just a newspaper or a movie or a TV show or a Facebook page. “Media” is an all-encompassing word. Which brings us to the question of the day: When will the various sectors grow up and admit that it's all coming together and if we want to make the most of that, we'd better start acting like it?
Umm, I won’t be holding my breath.
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