The Cable Provider Industry’s Overview

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Table of Contents

Introduction
Overview of the cable provider industry
Recommendations
Conclusion
References

Introduction

The cable provider industry generally is an industry that consists of several companies whose work is to distribute programs from cable networks to consumers through wired systems. This networking, therefore, means that they deliver TV programming to consumers via cable infrastructure on a subscription basis. The industry also offers high-speed internet access and voice telephony services. The technology that originated in the US in the 1940s has grown. The industry grew from providing broadcast signals to a small number of households to being the nation’s leading cable provider. However, in previous years, the number of cable subscriptions has decreased because of high-speed internet connections in the US. Consumers can access TV services on websites or stream the services. The number of household units has reduced because of the need to escape the monthly bills. Customers are cable’s most significant assets and therefore are key to the industry’s success. The industry has not realized its full (Queder, 2020) potential. Companies should learn ways to interact with their consumers. Also, be able to maintain their current momentum or improve it. The US home market generates approximately 46 billion dollars in hardware installation and revenue. Yet, cable providers are not the major players. They provide a critical ingredient.

A case study of Charter Communications Inc. shows that (Stiglitz, 2019) it is the leading cable operator. It serves more than 32 million customers. The company offers cable video programming services, internet services, and broadband communications solutions. The company faces a lot of competition from its counterparts, for example, Comcast and Cox Communications. For the company to succeed, it has to put an initiative on critical success factors like the ability to adopt new technology quickly, strive to access niche markets, ensure its distribution networks are extensive and has access to the required utility infrastructure. In addition, the less expensive subscriptions highly attract consumers. Despite the cable provider companies competing between themselves, they face external competition from satellite providers and mobile devices with broadband internet connections.

Overview of the cable provider industry

Definition of the problem

The cable provider industry is experiencing a slow death because of the decreasing number of subscribers. The low numbers of subscribers cause equally a low TV viewership. Yet, as much as death may be inevitable, cable hangs on. Subscribers are no longer willing to pay for channels they do not watch because of the emergence of services like Netflix and Amazon that provide streaming content.

Cable Industry Analysis

Industry at a glance

According to the industry’s key statistics, critical external drives, industry structure, and trends, cable providers have various strengths, weaknesses, opportunities, and threats. Its strengths are steady high barriers to entry, low imports, and low customer class concentration. Its primary disadvantage is that it is at its decline life cycle stage. The industry requires high capital investments and experiences low profit versus the sector average. However, cable providers have an excellent consumer index, meaning they could use the opportunity. Cable providers face threats of low revenue and low outlier growth.

Industry performance

The COVID-19 pandemic hurt the cable provider industry as there were increased layoffs worldwide. These layoffs led to a large number of people filing for unemployment benefits. Even though content consumption is growing, the number of subscriptions is still going down because people are not ready to spend on non-essential goods.

Industry Outlook

As the pandemic is gradually fading away, favorable economic conditions encourage new competitors to emerge. The industry is facing increasing competition from satellite telecommunications carriers and wired company carriers (Chiang et al., 2020). These companies offer all the services that the industry provides.

Product and market

The cable industry’s main products are basic premium and pay-per-view programming packages. The sector also enjoys revenue from paid video content and other services. The primary market is households as compared to businesses. Even in families, the consumers are more likely to be adults above 65. (Kathuria et al., 2019). This is because they are habituated to traditional TV programming and have more stable financial households to be able to pay for a subscription. The consumer age groups below 30 years are more likely to use streaming services than cable.

Major companies

The major players in this industry include Comcast cooperation, the leading cable provider, and charter communications Inc. the second leading cable provider. Other competitors are Verizon Communications Inc., The Altice Group, and cox communications Inc.

Operating conditions

The cable industry experiences a very high level of capital intensity. As a result, the industry spends more money on wages than capital. The industry is also highly regulated at the federal, state, and local levels.

Recommendations

For cable providers to be able to compete with satellite and video streaming providers, they have to find new innovative ways to increase their customer relationships. They should target understanding their consumers’ preferences and work toward improving their consumer confidence index. In addition, companies should put their capital more into market research and embracing new ideas because customer preferences are constantly dynamic to the existing environment.

The management of charter communications Inc. can apply the four management concepts to achieve the recommended solution. They can complete the solution by refocusing the company values on customer needs. Through this, they can be able to connect with the customers and get to attend to their needs. It is vital for businesses to connect to their customers to provide the best product quality. Finally, they should redesign their core business to improve productivity through suggestions they get from their consumers.

Conclusion

The cable industry is on its slow but sure deathbed. The administrative stakeholders could use their only remaining chances to save the industry from rising again. This does not mean the industry does not have the potential to grow to its best-performing rates. The sector will surely increase if it looks more into its market research and design of the technology. The company should adopt more of what its competitors are offering into their system by carrying out essential and meaningful benchmarks.

References

Queder, F. (2020). Competitive effects of cable networks on FTTx deployment in Europe. Telecommunications Policy, 44(10), 102027.

Stiglitz, J. E. (2019). Market concentration is threatening the US economy. Project Syndicate, 11.

Chiang, I. R., & Jhang‐Li, J. H. (2020). Competition through exclusivity in digital content distribution. Production and Operations Management, 29(5), 1270-1286.

Kathuria, R., Kedia, M., & Sekhani, R. (2019). An Analysis of competition and regulatory intervention in India’s television distribution and broadcasting services.

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