Cable TV’s future is uncertain. The triple-play product — television, internet and telephone — is under attack. Two of the three offerings are especially vulnerable.

Telephone service is threatened by the increasing number of consumers abandoning landlines for cellphone-only service. This is why the cable companies have been talking with wireless phone companies about mergers and partnerships.

The television portion of the Triple Play is under attack by the streaming services — Netflix, Amazon, Hulu and now CBS All Access (with a new, first-run Star Trek series). The streamers are attractive, with their incredible amount of TV series and feature films, uncut and often commercial-free. Access on smartphones, tablets, PCs, TVs and Blu-ray Disc players is simple. Cable’s “TV everywhere” is still playing catch-up. Also, the amount of programming on the streamers exceeds cable’s VOD offerings. Complete seasons of series are a great attraction.

Now, a new threat from streaming services comes as content producers — suppliers to cable TV and satellite services — are launching direct-to-consumer streaming. The Walt Disney Co. will launch two such services in 2019, one for entertainment programming and one for sports. The entertainment service will be the exclusive streaming home of Star Wars and Marvel movies. The sports service will be programmed by ESPN. Turner Sports has also announced the launch of its own streaming service. Should the Time Warner-AT&T deal go through, look for more Turner services to go that route.

Look at CBS All Access, featuring the CBS broadcast network daytime, primetime and late-night lineups, sports, your local CBS affiliate and exclusive streaming-only programming. The consumer no longer needs cable or satellite to watch anything on CBS.

Networks of the big media companies — the new Discovery-Scripps, Comcast-NBCU, Viacom, Fox and others — are the foundation of cable and satellite channel lineups. When that programming is no longer exclusive, or even worse, taken away, what does cable have left?

The internet. The streamers are accessed in the home and out of the home on mobile devices on the internet. Cable, however, is not the only way to get to the web. There’s Google Fiber, AT&T and others.

So, again, what does that leave cable? It leaves something that executives don’t want to hear. Something they don’t understand and maybe even despise or don’t believe in. Something with a very long ROI — five, six, maybe seven years or more.
Hyper-local programming.

If you think about it, this is what the customer expects. Looking at it from their perspective, in the media market where they live, the local cable TV operator is another editorial voice. To the consumer, the cable operator is on the same level as the local TV stations, local radio, local newspapers, local magazines —with all the national media overlaid on top.

If all the local cable operator provides is public access, that’s perceived by the consumer as how the cable operator chooses to express itself. If the local cable operator offers a local news channel and/or high school football, for example, that’s better.

The consumer doesn’t know about ROI, budgets, TV production equipment and staffing. They don’t know how expensive and time-consuming content production is. It must be easy, right? The consumer can shoot video with their phone. They’ve seen video like that used on local and national news, the internet, home video blooper shows and other places. Their DSLR camera can shoot HD video!

If video is no mystery, then a cable operator offering high school football, for example, can present games in full HD with production values like the National Football League. After all, how hard is HD production if it can be done on a phone or the family camera? That is the perception.

There are local news and sports channels available in some markets. Time Warner Cable was a pioneer with NY1 News (pictured) in the largest media market in the country. What about Nashville, Tenn.; Salt Lake City, Utah; or Boise, Idaho?

Why not many more markets from more operators? The sooner the better. Have you seen your local affiliate’s newscasts?

Precious time squandered on “happy talk,” self-serving station “feel good” cause-of-the-week efforts and self-serving network TV program promotion. There’s barely any time for the local news of the day, and not much in specific communities in the market. Mainly just broad, market-wide news stories, not much on the neighborhood level. Not to mention the mistakes and poor quality of the news coverage.

Cable TV would do good to partner with local newspapers and/or radio stations to produce news.

Newspapers have the journalists, radio stations have small staffs, cable TV has the technology — and a channel — the arrangement benefits all.

The reality of the long ROI mentioned earlier comes from personal experience. It involves the production and airing of a couple of local programs on cable. One was a weekly high school football half-hour preview/recap show and the other a monthly program featuring a local racetrack. At the time, it was an effort to convince the ad sales department to give us spots to air for advertisers on a “bonus” basis. Months later, after both shows were gone due to personnel changes or budgetary reasons, ad sales was approached by clients interested in advertising in the shows.

It takes a while for programming like this to get established. By the way, the producer of both of these programs went on to become an Emmy-winning videographer at a pair of local broadcast affiliates in the market.

If cable TV gets serious about local programming, the channel for such content has to be adjacent to the local network affiliates. This demonstrates to the consumer that the cable operator is committed to local programming. Don’t banish it to the part of the channel lineup where the infomercials and Leased Access live.

In the eyes of the customer, placement near the local broadcasters makes the local cable channel an equal. Make no mistake, it will take years of work, money and talent to begin to equal the quality of a network affiliate. The programming cannot look like “local cable.”

Traditional cable TV with the triple play and streaming services will exist side-by-side for a while yet. When that changes, only cable TV can offer the localism that can change the cable operator from a utility to a media company.

Randy Smith is a 35-year veteran of the cable TV industry and most recently a production manager at Charter Communications in St. Louis, Mo. He has worked in local programming management for cable systems since 1982.

Looking to gain and retain bundled subscribers, AT&T has rolled out a two-year guaranteed pricing to new residential customers who sign up for DirecTV, broadband and voice service.

According to the promo, which starts this Thursday (April 14), the plans factor in equipment costs for up to four TVs, with customers able to lock in a $89.99 per month for a triple-play that includes DirecTV Select, a 6 Mbps data service (with a WiFi gateway), and a voice offering that includes unlimited calls in the U.S. and wireline-to-wireline calls to Canada and Mexico.

By service, that guaranteed pricing breaks down as $50 for DirecTV, $30 for high-speed Internet and a reduced rate of $9.99 for home voice service.

Customers who pay for DirecTV and high-speed Internet on a single bill automatically qualify for AT&T’s recently introduced unlimited home Internet data plan.

AT&T, which clinched its acquisition of DirecTV last July, added 214,000 U.S. satellite TV subs in Q4 2015, and dropped 240,000 U-verse TV customers as it emphasized sales of DirecTV service. AT&T’s Entertainment Group also posted a net gain of 171,000 IP broadband subscribers in Q4, though total broadband subs were down 37,000.

Pushing ahead on trials that emerged in January, Google Fiber has introduced Fiber Phone, a $10 per month optional add-on that will become available to customers on its basic Internet service, 1-Gig standalone broadband offering, and subs who take its gigabit/pay-TV bundle.

Though Fiber Phone will be available as part of a double-play bundle by pairing it with a high-speed Internet service, the new option will give Google Fiber a way to offer triple-play packages that have long been available from its MSO and telco competitors.

Fiber Phone features unlimited local and nationwide calling as well as the same rates Google Voice offers for international calls. Using some of the same tech that powers Google Voice, Fiber Phone will let customers port their old phone number or pick a new one, and supports features such as call waiting, caller ID and a service that transcribes voice mails, John Shriver-Blake, product manager at Google Fiber, explained in this blog post.

As a cloud-based service, Fiber Phone is supported on a wide range of phones, tablets and laptops. “It can ring your landline when you’re home, or your mobile device when you’re on-the-go,” Shriver-Blake said.

He said Fiber Phone will be offered in a “few areas to start,” but the plan is to launch the service in all Google Fiber cities.

Google Fiber has not announced which markets will get it in the early going. But candidates include all the markets where Google Fiber has launched service -- Kansas City, Kan.; Kansas City, Mo.; Provo, Utah;  and Austin, Texas.

Google Fiber has also committed to deploy in Atlanta; Salt Lake City; San  Antonio; Nashville, Tenn.; and Charlotte and Raleigh-Durham, N.C. It’s considering expansions in Chicago; Portland, Ore.; Los Angeles, San Jose, Irvine and San Diego, Calif.; Phoenix; Oklahoma City; Louisville, Ky.; and Jacksonville and Tampa, Fla.

Google Fiber appears to be flirting with a triple-play offering as it gears up to test a residential voice service called Google Fiber Phone.

Google Fiber has sent invitations for the trial to some of its subscribers, according to The Washington Post, which has also posted an image of the invitation, which Google had hoped to keep confidential.

According to that invitation, Google is offering access to the Google Fiber Phone trial via its Fiber Trusted Tester program, which gives customers “early access to confidential products and features.”

Sharing apparent similarities with the Google Voice product, Google Fiber Phone provides a “phone number that lives in the cloud. With Fiber Phone, you can use the right phone for your needs, whether it’s your mobile device on the go or your landline at home.”

The service being trialed also supports features such as voice mail transcribing, call screening, do-not-disturb settings, and the option for testers to receive a new number or transfer one from an existing landline or cell number.

Google Fiber currently sells a 1 Gbps standalone service for $70, the option to bundle in a pay TV service, as well as a free "basic" Internet service that is limited to 5 Mbps down by 1 Mbps up for customers who agree to pay a one-time construction fee. Adding a residential voice product would complete a triple-play bundle for  Google Fiber. Separately, Google has launched Project Fi, a mobile voice service that starts at $20 per month that runs on WiFi hot spots as well as Sprint’s and T-Mobile 4G LTE cellular networks.

Google declined to comment about the Google Fiber Phone trial. It’s not clear if Google Fiber is testing the voice service in Kansas City, its first market, or if it has extended it to customers in Provo, Utah; and Austin, Texas. Google Fiber also has buildouts underway in Salt Lake City, San Antonio, Nashville, Atlanta, Raleigh-Durham and Charlotte. It’s also exploring deployments in several markets, including Chicago; Los Angeles; Portland, Ore.; San Jose, Irvine and San Diego, Calif.; Phoenix, Ariz.; Oklahoma City; Louisville, Ky.; and Jacksonville and Tampa, Fla.

In October 2015, Bernstein Research  estimatedthat Google Fiber’s network passed about 427,000 homes and 96,000 business locations, primarily in Kansas City and Provo, Utah, and that it had signed up as many as 120,000 paid subs.

Despite being ignored for years, landline voice service — once the cornerstone of cable’s triple-play bundle — is on the decline, but it’s not quite dead yet.

In fact, a new analysis from Sanford Bernstein telecom analyst Paul de Sa indicates cable can count on that revenue for quite a few more years.

Landline telephony has been almost an after thought in recent years, a service considered to be more of a retention tool than a product that brings in customers, like broadband or even video to an extent.

That is evident in buy-rates: Over the past five years, telephony adds for the four publicly traded operators have lagged broadband additions by a ratio of almost 2 to 1.

“By now, residential wireline voice service should have ceased to be,” de Sa wrote in his report. “There seems to be little reason why any consumer would pay $30 a month or more for a phone line.”

But the data shows a different trend, he noted. According to the National Center for Health Statistics National Health Interview Survey (NHIS), which obtained information from 21,517 households, more than half of the homes surveyed had a landline.

And the trajectory suggests landline service might not disappear for at least another decade or more, according to the data.

Landline voice customers won’t trend to zero at least until 2026, de Sa estimated, adding that he thinks there probably will always be a customer segment that retains a landline for emergencies or because wireless service is spotty.

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak agreed that landline telephony still has some life left, but added that ARPUs will continue to decline.

“Overall, traditional fixed phone growth is likely to continue to decline but I imagine it will last longer than people think,” Wlodarczak said.

That could have similar implications for pay TV and telephone company digital subscriber line (DSL) service.

According to NHIS, wireless-only homes are generally younger: 71% of respondents aged 25 to 29 didn’t have a landline, compared to 19% of those older than 65.

But they also were less affluent: 67% of renters were wireless-only subscribers, compared to 37.3% of homeowners. Adults in poverty (59.3%) and near poverty (54.4%) were more likely than higher-income adults (45.7%) to live in a household with only wireless phones.

The Sanford Bernstein analyst had three reasons for voice’s slower-than-expected decline:

Inertia: The opportunities to buy residential telecom services are few: Mostly when a new household is formed, due to a change in address or because of unacceptably high levels of frustration with the current provider.

“The answer to the question of why households still have residential voice (or DSL or pay TV) in the face of new alternatives that appear to offer superior value propositions may just be that they’ve had it in the past and there’s no particular reason to change,” he said.

Segmentation: While usage patterns vary differently among households, the behavior of a particular segment is unlikely to be representative of the entire base. The NHIS data shows differences in voice penetration around age, household makeup and income, just as value propositions for slower, cheaper DSL service compared to cable broadband, or pay TV (with traditional or “skinny” bundles) compared to over-the-top video, will probably continue to be appealing to a large population segment.

Pricing and retention strategies: Voice ARPU has declined over the past decade, but that is largely due to segment-specific offers like bundling, instead of mass repricing. According to de Sa, there are ways to keep customers and maintain penetration rates by offering products with different price points (like varied amounts of long-distance minutes for voice, different speeds for broadband and different channel bundles for pay TV) and through discounts or other promotions when subscribers call to disconnect.

“As with mobile, the cost of these retention efforts is generally invisible to investors relying on reported financials, only being revealed in the long term as the offers work through the base,” de Sa wrote. “Metrics such as net adds and churn can therefore be misleading from a value-creation perspective, though they garner attention and drive stock movements around the quarter.”

Telephone Line

Cable telephony customer adds for the four publicly traded cableoperators (Comcast, Time Warner Cable, Charter and Cablevision) have lagged broadband by a nearly two-to-one margin over the past five years. (Figures in thousands)

                                 2010           2011             2012              2013                2014              Total

Telephony Adds. . . . 1,602. . . . 1,022. . . . . . 1,003 . . . . . . . . . 776 . . . . . . . 1,088 . . . . . . 5,410

Broadband Adds . . . 2,064 . . . 1,897. . . . . . 2,039 . . . . . . . . . 1,791 . . . . . . . 2,236. . . . . 10,027

SOURCE: Company reports