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 introduced to allow families living in remote country regions to enjoy the benefits of experiencing the national TV programming channels being enjoyed by city-based families. The end of the 1990s saw the penetration of cable TV reach its appex. About 70% of American homes had signal transmission via cable and from hereon this percentage started to fall away.
While cable delivered a signal to each home via either an above ground or 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 ever increasing advance of satellite TV into the homes of American families has resulted in a decline in the usage of cable TV. This earlier technology is doomed to go the way of the dinosaurs - whilst it may be some time away, it will eventually happen.
So what are the problems confronting the cable companies? There are two factors here - firstly the improved technology factor, and secondly the intense competition provided by the satellite companies.
Cable TV needs to embrace better technology
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.
Cable companies need to match the satellite companies.
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.
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