Cable Part
Sep/080
Cable Part
Why Cable TV is Doomed - the Future is Satellite TV
The decline in the usage of cable TV is slow but continuous. In a market of a constant size, an increase in the penetration of one product inevitably means a loss of market share in another. In the case of the TV market, the increase in market share of satellite TV means there's a decline in cable TV.
Cable TV was originally seen as a means for isolated country areas to experience the television benefits then being enjoyed by city dwellers. From a slow beginning in the late 1940s it developed into a huge industry by the 1990s influencing the lives of many people. By the end of the 1990s, it was estimated that approximately 70% of American homes had access to cable TV.
However, the 90s saw the introduction of satellite TV and the start of the decline of cable TV. The satellite TV providers made a very aggressive assault on the TV industry and very quickly had gained a large slice of the market. Since then the position of the satellite companies has got stronger at the expense of the cable companies.
While cable delivered a signal to each home via an underground cable, the signal for this new innovation came from satellites located over the Caribbean Sea. Reception at each subscriber was through a small circular dish usually affixed to the roof of a building. As long as the dish had an uninterrupted view of the southern sky, a TV set would be able to display a perfect picture and sound.
Like cable TV, the satellite TV providers' packages are available through a monthly subscription and a 1 year contract. Most of the channels shown on cable are also available with the satellite companies, so a family switching over to satellite TV from a cable TV provider will still be able to enjoy their favorite programs.
The rise and rise of the penetration of satellite TV into American homes has come at the expense of cable TV. Cable TV is on the decline at an ever increasing rate, and although its demise may be some time away, it will eventually happen. Not only is this an example of superior technology replacing inferior technology, the downfall of cable TV is being accelerated by the overtly aggressive promotion policies of the satellite TV providers.
So what are the problems facing the cable TV industry? These can be divided into two - firstly the technological problems, and secondly the threats from assertive satellite competitors.
Technological Issues confronting Cable TV
1) As the TV signal is delivered to subscribers via cable, then bad weather conditions may affect these cables. Cable TV is not as reliable as satellite on this score.
2) Cables cannot deliver the much larger number of channels that satellite transmission can. Cable therefore cannot match satellite when it comes to variety of channels on offer.
3) Picture and sound quality with cable is inferior to that of satellite - satellite TV signals are 100% digital something that the cable companies cannot easily provide.
4) The nature of satellite TV means its more easier to incorporate new technologies into the system.
Threats from Aggressive Competitors
1) As the satellite companies are chasing market share, they are keeping their subscription fees as low as possible. The cable companies' fees have been increasing at a greater rate than those of their satellite competitors.
2) Both the major players in the satellite TV industry offer new subscribers free equipment and installation, such as a satellite dish, set-top equipment etc.
3) The installers of the satellite systems offer a range of free gifts, with the satellite companies offering special deals and prices for new customers.
4) The satellite signal enables the delivery of a larger number of channels. This factor alone is encouraging large numbers of families to dump cable TV.
5) Numerous industry surveys point to satellite TV companies placing greater emphasis on customer service than the cable operators.
6) The ever-increasing number of subscribers to satellite TV is in itself encouraging families to switch over.
In the past, cable TV has been at the forefront in providing the American public with a wide range of viewing options. Unfortunately the advent of satellite TV has had an adverse impact on cable TV. Unless the cable TV companies can match or better the technological advantages enjoyed by their satellite competitors, then their demise will be final.
About the Author
The author, Dave Neville, has an interest in a website that deals with satellite TV, and includes a review of the differences between a satellite TV program provider and a cable TV provider. Compare satellite TV providers to see how they differ.
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