In a healthy market, whenever competition arises – companies respond to it by competing on services and prices. But that is not the case when it comes to the cable industry. Although there are a variety of low-priced streaming options available in the market we don’t see cable TV service providers reducing their prices any time soon. Every year cable TV service providers companies increase their prices, which kind of compelstheir existing customers to “cut the cord” and switch to streaming services which are relatively lower in prices with some added advantage – that too without any agreements.
These circumstances depend upon the location you reside and it mostly happens in the U.S because while satellite and streaming services can be availed from anywhere but cable services have yet to reach 100% population. If you live in an area where cable services havea monopoly then you will face higher prices every year. Some users keep renewing their subscription at the initial year price with cable alternative by threatening them to move to other services – works for some – may not work for everybody – but trying never hurt? People tend to do this by dropping the satellite servicesas well but it assumes that installation and bad weather are the problems. So, these options are not often available.
Cable service providers like spectrum and Xfinity have reached over 44 states and might even reach all the states but there will still be some places where cable won’t be functional. Why? Because the infrastructure required for cable services to function cannot be built everywhere. While prices play a vital role, availability plays its role and channel line-up is also something consumers are willing to pay. For instance, Spectrum channel line-up is one of the most desired lists, due to its all-inclusive list of channels, and how they’re designed to entertain everyone in the household is simply amazing!
Typically, after one year of using a conventional cable TV service providers from a notable cable company on the market, they significantly increasethe prices. This is a random experience with a cable company but this happens with everybody once the year of subscription completes – whether you got the promotional deals or not. If there is enough competition in the market, the prices stay reasonable but if there is a monopoly it goes up every year which is what we get to see quite often – applicable in every industry but not pretty detectable in the cable industry. Cable companies add 20% to 25% in their cost of content to charge their customers eventually. But it looks like that competition has a lower effect on prices as all cable companies pay the same for the cost of content they get from premium networks. It depends upon the contract of the cable company with the outside media company and the services they are lending. Some cable companies now have streaming modulesfunctioning and this cost aids them to expand and build further infrastructure.
As one of the common practices, the cable companies raise their subscription prices after the promotional period completes, and that happens every year. They use this tactic to attract new customers which always work. Most people are “cord-cutting” and moving to on-demand content which is increasing day by day and people are liking the content on streaming services. They don’t want a subscription for channels they don’t watch or hardly get to watch and whose price increases every year. According to a good majority of cable users that have switched to streaming services, it is a waste of money and time as there are plenty of cheap alternatives available in the market.
The bottomline is
Most cable operators blame broadcasters for high prices but that’s also partially true. In the aforementioned debate, we have tried to shed light on all the possible factors that cause an increase in cable service providers and how the cable industry is working on the lines of monopoly as the prices did not reduce even after the raised competition. So, the answer to the question will cable TV service providers to become cheaper with the competition or not? Well, until now cable TV hasn’t taken any such actions or at least the ones that are noticeable which is why we do not really see that happening anytime soon. Perhaps the cord-cutting rate is not drastic yet that might bring the prices down because streaming services are significantly low in prices than cable services.