While it’s no secret to close observers
of the trend to cut the cord of increasingly expensive Cable TV providers, the US
cable still hasn’t found an answer to the growing trend of consumers deciding
switch their allegiance to big cable’s direct competitors: Satellite, telecoms,
and video streaming services.
Companies, especially big ones,
have many pros and cons but the biggest con all big companies have is that they
do have a tendency to shoot themselves in the foot. Cable TV providers as
consolidated and concentrated as group of firms can get without a round anti-trust
suits making the news, have made the mistake of raising prices on their
subscribers as if there aren’t any alternatives out there that can provide
their customers the content they love as and when they want it and for a whole
lot cheaper.
The growing subscription fees
offered by cable TV providers have
trigged a spree of cord cutting to the point it’s actually a cultural
phenomenon, a cultural phenomenon that may cost them dear.
According to a report in the LA
Times, Cable TV providers will suffer a notable drop in household penetration
as “more people are expected to embrace lower cost options, including free
programming and online video services such as Hulu, Netflix and Amazon Prime
Instant Video”[1].
This demand for cheaper
alternatives to cable is being driven by a dual wedge of cable TV providers
themselves jacking up the price for their services and people becoming
increasingly cost conscious which means the new market household marker for TV
subscriptions will be lost because “The high-cost of TV subscriptions has
prompted families to switch -- and discouraged some younger consumers from
getting their own TV subscription when they leave their parents’ homes”[2].
The big winners from this
growing consumer diverge away from cable will be Satellite and telecoms giants
such Direct TV and AT&T as Satellite TV providers stand to add 1.8 million
customers to their already massive pool of subscribers and Telecom giants such
as Verizon and AT&T are expected to pick up a massive 5.4 million
subscribers in the next four years[3].
With news like this, it’s no surprise
there has been a round of big mergers most notably between Comcast and Time
Warner and, tellingly, between Direct TV and AT&T.
.jpg)
However, it’s not all bad for
cable TV providers as they are well placed and currently are focused on exploiting
the demand for content across a number of devices. The demand for content
across a number of devices has shot up as according to a report by the New York
Times “Mobile video viewing went up 57 percent over the same time last year,
and overall online video was up 43 percent, representing more than 35 billion
viewings”[4].
The “TV everywhere” trend has
also been a great ally for cable TV providers as it has helped them maximize
their advantage over their growing list of competitors: sports programming.
According to the New York Times “TV Everywhere viewing rose 246 percent… driven
mainly by interest in sports programming”[5].
In sum, Cable TV providers are
under pressure but it’s pressure they can handle, for now at least.
[1] M.
James, 2014, Cable TV predicted to lose customers to phone and satellite firms,
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-cable-firms-to-lose-customers-to-phone-and-satellite-tv-20140603-story.html
[2]
Ibid
[3]
Ibid
[4] M.
Wood, 2014, TV Apps Are Soaring in Popularity, Report Says, http://bits.blogs.nytimes.com/2014/06/04/report-tv-apps-are-soaring-in-popularity/
[5]
Ibid
No comments:
Post a Comment