The Future of the Tablet is on Display in Ohio

on March 30, 2015

What if I told you, the future role of the tablet is on display in Ohio? That is exactly where I have found a showcase example of where I see tablets going in the future. There is a narrative around tablets the growth is over. I don’t subscribe to this narrative. However, I also think what many initially believed the role of the tablet (as a replacement computer) was going to be is not the area where I am optimistic of its growth.

In this post for insiders (which I’ve made free for the purpose of this column so feel free to read it), I explained how I see the role of the tablet evolving as quality tablets enter the market at extremely low prices. Inevitably, when hardware drops, margins get so low the business model shifts toward monetizing services, not the hardware. That is exactly what is taking place in Ohio.

I stumbled across a company called Buckeye1, a local cable and internet services provider in Northwest Ohio as well as Southeast Michigan. They are using iPad’s as a part of their internet services bundles which break down like this:

50mb Internet Speed – 500gb Data Plan Included
iPad Mini 2 Included
The Blade All Access plus Sunday Print Included (all access means all digital products as well as electronic delivery of the newspaper inlcuded)
Watch BCSN Included (Buckeye Cable Sports Network, Live Streaming and VOD 700 Live Local Sports events a year from High School Football to Minor League Baseball)
Price starts at $50 per month

Premium TV Services like HBO, ESPN, Fox News, etc., can be added. We have several price points depending on status as current customers, new customers, with or without some TV service, etc. Buckeye1 is the only service we offer that includes the iPad.

What makes this interesting is the iPad is simply part of the bundle. By itself, the bundle is fairly compelling and in line with rates in other markets. The iPads come pre-loaded with all the Buckeye1 TV channel apps covered in the bundle, the digital edition of the Blade newspaper, and other core home services.

Screen Shot 2015-03-29 at 5.16.21 PM

Interestingly, this entire solution is fulfilled by Apple. When orders come in for the Buckeye1 service, Apple pre-installs the applications bundle and provides the co-branding on the back of the iPad as well.

The bundle and the service is paying off for Buckeye1. They provided me the following stats, which are a result of this creative bundling:

  1. As of today we now have 10,000 subscribers. We soft launched on September 15th with our first rate-based promotion on Black Friday.
  2. 91% of all subscribers are completely new to The Blade (newspaper).
  3. 25% of all subscribers are completely new to Buckeye CableSystem
  4. Our current pace is 2,000 subscriptions per month and we finished 2014 with 4,000 subscribers

Another fascinating tidbit I learned from this service is it actually grew subscriptions for the Sunday print edition. I’m not sure too many newspapers can claim their print delivery subscriptions grew.

I’ve been articulating, as a point of my tablet market analysis, that services companies who use tablets to drive their services are better positioned strategically than most companies trying to monetize the hardware. If you think about what Comcast or Dish or DirecTV could do as a bundle using tablets as portable TVs, and mobile entertainment stations deeply integrated into their services, the value add of the tablet hardware is significant. It is hardware as a service, broadly defined.

I’d love to see more service provider examples of tightly integrated software and services, but leveraging a tablet as a service model to drive their business. I believe we will. My tablet narrative and bull growth case depends on this to happen in the market. Prior to the Buckeye1 example, I was just making up examples, as a series of “what if” scenarios, of how this business model shift would take place. Little did I know I’d find the perfect example to highlight my case for tablets in Ohio.