Is Cable Television a Monopoly?

There are basically six technology-driven threats to the traditional rental model: (1) Cable companies offering Video on Demand (VOD), (2) online movie downloads, (3) online movie rentals, (4) disposable DVDs, (5) illegal movie downloads and DVD copying, and (6) Digital (or Personal) video recorders (DVR). (Jackson) One could also consider traditional pay-per-view (PPV) as and additional substitute. Only one of these seven, online movie rentals has proven to be a major competitive substitute for traditional movie rentals. All other areas, except traditional pay-per-view are expanding rapidly, but some face significant challenges.

In the Pay TV industry, it would be difficult and expensive to enter the market. The barriers to entry involves costly infrastructure that is already controlled by the big players in the market. Whether programming is coming over cable, fiber, DSL, or satellite dish, the costs to implement this infrastructure is very high. The cost to launch a satellite in 1997 was $51 million, which would be close to $80 million in present dollars (DISH). The threat of new entry is low.

Though it’s not a direct competitor because it’s doing way better than Hulu, Netflix is still a huge reason why people are not signing up for Hulu. In price, there’s not much difference with the two, but the content of Netflix has produced some of the most critically acclaimed shows such as: House of Cards, Stranger Things, and Orange is the New Black. Cable TV can also serve as a threat to Hulu if you look at DirectTV for example it has the same features of

While Redbox is one of our biggest competitors for viewers, it seems that the DVD rental market is on a downward trend. Therefore it is probably best to focus on companies that are intent on delivering video streaming. One recent player in the market is Sling TV, which is a subsidiary of Direct TV, and they have an offering of content that covers an area of entertainment that we have not been able to crack into (Katzmaier, 2015). They stream live cable programs such as AMC, TNT, TBS, Disney, HGTV, Cartoon Network, and ESPN to users for twenty dollars a month. While they are still subject to commercials and do not offer the ability to fast forward on certain channels, their product offering is one that differs enough from Netflix to cause

Occasionally, people use to go out and rent DVD’s to watch a specific movie from rental stores. Advancement in technology has brought a sufficient change in customer’s behaviors, today DVD rental stores have almost gone. Moreover, by time we saw enormous increase in channels being provided by cable providers, but today even that has been replaced by streaming media devices, thus my time, role of cable providers might also disappear due to the introduction of devices such as Netflix, Apple TV etc. “DVD sales have also been hit. The Los Angeles-based Digital Entertainment Group estimates DVD sales in 2008 fell 8% to $21.6 billion from a year earlier, while DVD rentals were flat.” Charny, Ben. "Viewers Tap Free Web Content." Wall Street Journal, Eastern

Sirius XM has established a deep economic mote in its industry. Sirius Satellite Radio and XM Satellite Radio were the two largest satellite radio providers in the U.S., but these competitors were both losing. In 2008, they merged to become Sirius XM and are now the only satellite radio provider in the U.S. Due to high startup costs for a satellite company, Sirius XM does not have any competition. In 2014 Sirius XM had 27 million subscribers or about 13.5 % of the total market with annual sales approaching 4 billion. Sirius XM's signal spreads throughout the entire country and it has brand recognition countrywide. Contrary to free charge, ad driven radio such as Pandora, Spotify, and iHeartRadio, Sirius XM is a subscription-based model,

Hulu is a first mover in this space and is currently enjoying the first mover advantage. However with the ubiquity of internet technology accompanied by lower costs and the commoditization of the technology, the barrier to entry will be reduced and more players will be attracted to the profitable online video business, eating into Hulu’s profitability and success. Also, the increase in IT investments in the internet age causes “a Winner-take-all dynamic and high turbulence, as each group of dominant innovators is threatened by succeeding waves of innovation” (McAfee and Brynjolfsson, 2008) in Schumpeterian competition. This makes Hulu’s success vulnerable.

At this point, stories about video streaming services attempting to steal money and viewership from Youtube feel older than Youtube itself. Challengers have come and gone, but very few streaming services have managed to stick around and find success, and none of them have become the top streaming service. Google gave up and just bought Youtube instead. But with streaming becoming the primary mode of watching content now, companies still have to try their hand at it, and now Comcast is throwing their hat into the ring. The new Comcast video streaming service will be called Watchable, and even if it's not the future of streaming, it looks as though Comcast video streaming could very well be the future of Comcast.

In a world of Hulu, HD TV, and online streaming, the television industry has had no choice but to embrace shifting consumer trends within the industry. Now that Internet streaming has allowed consumers to watch whatever they want, whenever they want, it is becoming harder for cable providers to keep up with consumer demand. Television broadcasters must take advantage of the bandwidth that they have available to them if they are to compete in the viewing market. With streaming sites such as Hulu, Amazon, and Netflix gaining competitive advantage in the market, television broadcasters can no longer sit back and continue to run as they always have. Accordingly, these television stations have begun making much-needed modifications.

Hulu sets themselves apart from their main competitor, Netflix, by offering the current seasons of shows as early as the day after they air on TV. But, this is starting to concern one of their main investors, Time Warner. Time Warner, is concerned with Hulu’s business model because they fear consumers will drop their “pay-TV subscriptions” (Hagey & Ramachandran, 2016). While Time Warner has a stake in the success of Hulu, they are concerned that Hulu will

The stated causal claim is: When you don't’ have cable a series of misfortunate events will strike your life, until it’s ultimately leaving you to shave your head for money. The claim itself is supported by DirectTV, a cable tv network: while portraying the life of a man who has no cable, and the consequences that follow him because of his lack of resources to meet cable. As DirectTV is the reasoner in this commercial, they had committed an error in their advertisement and created a slippery slope. Just because someone doesn't have cable they won't automatically get depressed, and will fuel this chain of events of bad decisions and horrible luck. Their causal claim is leading to very unrealistic and drastic conclusions. The claim itself is

Comcast is a large cable and satellite television provider in the United States. The company has been plagued with internal weaknesses and external threats in recent years and is in desperate need of turning around its customer service department as quickly as possible. Aside from customer service, the way the television industry is marketed to is changing, Comcast has to stay on the cutting edge in price, product quality, flexibility of plans, and customer service. Comcast has many different areas of their business that need to be analyzed to see where they can invest time and monetary resources to improve the quality of their product and service to their customers.

Growing competition as a challenge represents the various companies that are now entering the market of online media-streaming. Companies such as HBO, Amazon, Google, and Hulu Plus have all began to offer media-streaming on the same electronic devices as Netflix, Inc. Currently Netflix, Inc. remains in the lead amongst its competitors; however, there is no guarantee that this advancement is a permanent one. It is inevitable that emerging companies will come up with creative ideas to gain the competitive edge and receive more consumers. For example, Amazon.com has “amplified

But, unfortunately due to the enormous cost and very little public interest and demand Time-Warner decided to pull the plug on its nationwide change over to digital lines. This shows that the cable companies are surpassing the consumer demand for technology, making this industry a very hard one to market.

The next study that is examined was the Five Competitive Forces. This shows the industry’s competitors, threats of new entrants and substitutes, and the power of the customers and suppliers. The main rival competitors within the TV service providers industry are Dish Network, Direct TV, Comcast Cable, Time Warner Cable, and Atlantic Broadband. The rivalry of these competitors could lead to lower profits due to price competition and new technology as each is trying to stay competitive in the industry.