The pay-TV industry is experiencing slow, but steady subscriber drain thanks, in part, to the appeal of streaming video services. Many providers have looked to consolidate as the subscriber pool declines, and have launched low-priced, skinny bundles or streaming options to appeal to would-be cord cutters. Despite this, Layer3 recently jumped into this marketplace with its brand new, premium, wired cable TV product, honing in on key weaknesses of traditional pay-TV – namely, poor customer service and a lack of relatability with digitally savvy consumers – in order to offer a better, more appealing cable TV service.
21% of US Millennials say they are considering cutting the cord
According to the American Consumer Satisfaction Index, consumer satisfaction with pay-TV is continuing to decline despite well-publicized efforts by major pay-TV providers to improve their customer service and the capabilities of their products. Pressure from streaming providers is exacerbating this dissatisfaction with digitally savvy consumers, such as Millennials, finding value in the convenience, personalization and availability of streaming services, which are typically less expensive. In fact, 21% of Millennials say they are considering cutting the cord, compared to 15% of all consumers, according to Mintel’s Home Communication Services US 2016 report. Layer3 has acknowledged that many Millennials tend to view cable as an outmoded and inferior way to experience video, and seems determined to change this perception.
“the new cable”
Layer3 began the first full-market rollout of its service in Chicago in September 2016, and is slowly expanding across the country with marketing efforts emphasizing how Layer3 TV is different from ordinary cable service. The company has trademarked the descriptor “the new cable” to differentiate the brand from “old cable,” and ads often feature Layer3’s friendly customer service, leading with messages such as, “Cable that actually cares,” or “Tired of cable companies treating you like a number?”
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Layer3 backs up this messaging with its customer service tactics. The provider offers a variety of helpful self-service features, giving customers more control over their subscription, but also offers 24/7 customer service availability via convenient text messaging or chat. Additionally, Layer3 sends handwritten welcome notes and chocolate to new customers. Thrilled recipients have been tweeting about these communications, which have been featured in Layer3’s email promotions.
Layer3 TV incorporates a number of other conveniences into its product, many of which are typically associated with streaming video providers. These include streamlining options to just one content package, eliminating hidden fees, requiring no contracts, making it easy to cancel service online at any time and offering a personalized service that learns the habits of the user.
But Layer3 offers more than a streaming video service offers, and it wants consumers to know that. Cutting-edge technology is an important differentiator that Layer3 highlights in its quest to reinvent cable. The provider features an all HD service, more simultaneous DVR-ing (up to eight shows at once) and a 4K-capable, high-capacity DVR that comes in different colors to coordinate with the customer’s home. The service also integrates social media, streaming music and more. Layer3 even extends its “hip” image and focus on sleek technology to its fleet of vehicles. Instead of the clunky installation vans used by “old cable,” Layer3 sends its technicians out in brightly-colored Teslas.
Will Layer3 appeal to cord cutters?
At $89/month, maybe not. After all, the cost of pay-TV was the primary reason consumers cut the cord. Some may consider subscribing, however, if they perceive real value for the money. Even if Layer3 can’t win the hearts of cord cutters, it seems likely that its value proposition will strongly resonate with pay-TV customers who are dissatisfied with their current provider.
The cable industry has an image problem. If Layer3 can solve it by living up to its promise of offering cutting-edge TV service and the best customer care, this upstart cable provider may be able to win the hearts of “old cable’s” frustrated customers, and become a legitimate competitive threat.
Direct mail and email campaign images in this post are from Mintel Comperemedia and Mintel ePerformance.
Emily Groch is Mintel Comperemedia’s Director of Insights, Telecommunications. She provides omni-channel marketing analysis and competitive insights to wireless, TV, internet, over-the-top, and home security service providers across the US and Canada.
