In a healthy market, companies respond to it by competing on services and prices whenever competition arises. But that is not the case when it comes to the cable industry. Although various low-priced streaming options are available, we don’t see cable TV services reducing their prices anytime soon. Every year, cable TV companies increase their prices, which compels their 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. In this article, we’ll see if cable TV (Traditional TV) will become cheaper with the competition.
Competition Makes Cable TV Cheaper
These circumstances depend upon your location, and they mostly happen in the U.S. because satellite and streaming services can be used anywhere. Still, cable services have yet to reach 100% of the population.
If you live in an area where cable services have a monopoly, 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 services, but it assumes installation and bad weather are the problems. So, these options are not often available.
Cable TV cheaper service providers on competition like Spectrum and Xfinity have reached over 44 states and might even get 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, the 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 outstanding!
The Prices Practices for Traditional TV
Typically, after one year of using a conventional cable TV service from a notable cable company on the market. They significantly increase prices. This is a random experience with a cable company. But this happens with everybody once the subscription year is complete – whether you got the promotional deals or not. If there is enough competition in the market, the prices stay reasonable.
Still, if there is a monopoly, it goes up yearly, which we see quite often—applicable in every industry but not pretty detectable in the cable industry. Cable companies eventually add 20% to 25% to their cost of content to charge their customers. As a result, cable TV is becoming cheaper with competition.
But competition has a lower effect on prices, as all cable companies pay the same for the content they get from premium networks. It depends upon the cable company’s contract with the outside media company and the services they are lending. Some cable companies now have streaming modules functioning, and this cost helps them expand and build further infrastructure.
One common practice is for cable companies to raise their subscription prices after the promotional period ends. Finally, that happens every year. They use this tactic to attract new customers, and it always works. Most people are “cord-cutting” and moving to on-demand content, which is increasing daily, and people like the content on streaming services.
Most cable users who have switched to streaming services say they don’t want a subscription for channels they don’t watch or hardly get to watch, and the price of these channels increases every year. According to them, it is a waste of money and time. There are plenty of cheap alternatives available in the market.
Enhanced Technology
Cable providers are upgrading their technology to compete with streaming services’ seamless viewing experience. This includes cloud DVR, voice-activated remote controls, and improved on-demand libraries. By enhancing the user experience, cable companies hope to justify their pricing and retain subscribers so that cable TV channels are cheaper.
Partnerships with Streaming Services
Some cable companies have partnered with popular streaming services to stay relevant. For instance, Comcast offers Netflix and Hulu integration through its Xfinity platform. These partnerships provide added value to subscribers, combining the best of both worlds in a single package.
Will Cable TV Prices Actually Drop?
While the competition has prompted cable providers to adopt various strategies to stay competitive, the question remains: will cable TV prices actually drop? The answer is nuanced and depends on several factors for Traditional TV:
- Content Costs: One of the primary reasons for cable TV’s high cost is the expense of acquiring and licensing content. Sports programming, in particular, is a significant cost driver. As long as networks and sports leagues continue to demand high licensing fees, it’s unlikely that cable providers will drastically reduce their prices.
- Market Dynamics: Market dynamics also influence the pricing of cable Traditional TV services. In areas with multiple cable providers, competition tends to drive prices down. Conversely, prices may remain high in regions with limited options due to a lack of competition.
- Consumer Preferences: As more consumers switch to streaming services, cable providers may need to adjust their pricing strategies to remain attractive. However, this doesn’t necessarily mean lower prices across the board. Instead, we might see more flexible pricing models, with various options catering to different budgets and preferences.
- Regulatory Factors: Regulatory changes can also impact cable TV pricing. Government interventions promoting competition and protecting consumer interests could create more favorable pricing conditions. However, regulatory actions are often slow and subject to political considerations.
Cable TV Cheaper: The Bottom Line Is
Most cable operators blame broadcasters for high prices, but that’s also partially true. In the debate, as mentioned above. We have tried to shed light on all the possible factors that cause an increase in cable service providers. How the cable industry is working on the lines of monopoly.
Prices did not reduce even after the rising competition. So, the answer to the question is whether cable TV will become cheaper than the competition or not.
Well, until now, cable TV hasn’t taken any such actions. So, at least the noticeable ones, which is why we do not see that happening anytime soon. Perhaps the cord-cutting rate is not drastic, which might decrease prices. Because streaming services are significantly lower in price than cable services.
