Cable One, a small cable company, is slowly shifting to a TV-less cable corporation. Following the trend, Cable One turned to produce more broadband internet services than television ones.
The usual way that cable companies offer their services is in the form of the pay-per-bundle television business. The pay-television or subscription television works by consumers buying bundles with different channels included. The range of bundle prices differs from one distributor to another and depending on the networks included. Usually, popular networks like ESPN and Fox News cost more than other systems. Different channel owners bundle their less-popular channels to the popular ones to gain further income.
With subscription-based television services, customers get to choose what bundles will they buy from their distributor. They have the freedom to purchase what they think would be better for their television. Distributors often offer discounts when purchasing more network bundles from them. However, this kind of service also limits what network a customer can watch. For example, the price of a package can cost twice that of another bundle. You will opt to choose the cheaper package even though a more expensive one will bring more favored channels. Pay-television is really a matter of money for some people.
On the other hand, emerging technology, broadband network services rely on internet access. Comparing broadband service and former internet service, dial-up, consumers favor broadband service. The reliability and stability to stay connected to the internet make the service popular nowadays. Effortlessly, users need to open the browser, and it connects to the web instantly. Some cable television companies adapted this service to provide their customers with better services.
Cable internet access uses the platform of cable television to provide networks. Cable internet became popular due to its fast internet service. Users do not need phone service for it to operate. The internet can be used anytime as long as it’s included in the package. Moreover, the internet speed offered by cable broadband services makes it a better alternative compared to other broadband. Heavy internet users also often choose cable broadband since the service allows them to stream a large amount of data. Gamers even opt to select cable internet service.
A drawback of cable internet service is that its internet speed can slow down at peak hours. This slow internet service is when a high volume of people use the web at the same time. The cable internet is also rarely available on rural communities and can be a bit expensive compared to other cable services.
The emerging technology allowed Cable One to shift to cable broadband service from the pay-TV services. It all started when the programming rate is continuously increasing. Since the programming rate is rising, the cost of network packages also increases to the point that companies earn a low income. Still, the companies need to set their bundle at a lower price to keep their customers. Industries like Google lose a large amount of money by offering Youtube TV bundles as Todd Juenger, an analyst, explained.
However, larger cable companies stayed in the pay-TV business since they already have a lot of customers. Their loyal customers are willing to pay a more significant amount even though cheaper services are being offered.
Large companies can offer cheaper packages to customers who want to cancel their subscription for them to stay.
The combination of cable television and internet services also save cable companies from losing their customers. However, this strategy may not last long according to Cable One.
According to Julie Laulis, the CEO of Cable Company, the combination of television and the internet is not as promising as it looks. Some customers may want to purchase the bundle, but it’s not enough to gain income to sell solely pay-TV services.
Laulis said, “We don’t put time and resources into pretty much anything having to do with the video.” It seems like the company favors the internet services they provide more than the television cable ones.
People will not throw away the internet service as compared to the television cable. The sales of television cable are also going down. The CEO also added that their conclusion came up from the data gathered six years ago.
In addition to this, Cable One company refuses to increase costs from network distributors that offer different channels. The company also doesn’t stop their customers from ending their television subscription.
Instead, they offer expensive video services like Youtube TV and Hulu Services or internet services. One reason why they provide over-the-top video services is to inform consumers about their choices.
But why did they shift to provide more internet services is the high amount of customers that internet service brought. Their customer opts to buy broadband web services rather than video cable, or the combination of the two.
The shift of customers to internet services does not only rely on the fact that web services had good advantages. Instead, consumers do not turn a blind eye on the increasing and competitive packages that cable video companies.
Not only in customers but Cable One also increased their income. In terms of income, Cable One earned an enormous 70 dollars average revenue in one quarter.
The decline of television or video revenue is not exclusive on Cable One alone. Although other aspects like profit margin before interest increased, the whole revenue dropped at around five percent in one year.
Despite the decline in revenue, large companies like Comcast will not stop their distribution of cable video services. Like it was said before, loyal customers will not choose to stay with their subscription regardless of the price.
The change of one cable company’s choice regarding their services offered shows the effect of technological innovation. Services like what Netflix or Amazon gives may be one of the reasons that caused the transition of customers’ preference. However, a TV-less cable future might be a result of the continuous change in the distribution of cable companies.
