U.S. multiple system operators (MSOs) have generated an average total return to shareholders of 17% percent, while U.S. cable MSOs have performed even better, at 18% percent. According to Accenture research, this strong performance has been driven primarily by top-line revenue growth.
This revenue and value growth has been enabled by three structural advantages:
Superior broadband technology
Economics of the legacy content distribution model
Favorable regulatory status quo
Yet, there are several storm clouds appearing on the horizon: Average Revenue per User (ARPU) is declining with increased competition from new entrants including telcos and OTT (over-the-top) players; content creators are increasingly looking to bypass “middle men” distributors; and technology is rapidly changing, with super-platform players increasingly moving across industry verticals.
Complacency can be an enemy of high performance, especially given the rapid changes in the $2 trillion communications, media and technology industries. Cable MSOs have an opportunity to seize the value-growth opportunities that these potential disruptors are creating.
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