Why is the cable distribution business so uncompetitive?

Juliet D'cruz

Updated on:

There are multiple reasons when it comes to why and how the cable distribution business has grown so uncompetitive. Though, one cable service provider can have exclusive access to install its Hybrid Fiber-coaxial plant in the area. Conversely, many states now consider this irrelevant in their markets. One of the primary reasons and notable inclination in recent times could be that the well-known internet service providers which include market leader’s names like AT&T and Verizon that have surpassed local franchises by creating state-wide franchises. 

What are the potential alternative options? 

Nowadays, Netflix, Hulu, and Amazon prime are the top online streaming services of the present. They have replaced the need for a local physical network with an alternative infrastructure of data centers. You can install and maintain these OTT services at significantly cheaper rates than the HFC one. You might think that why is it so? The possible answer could be that names like Amazon and Rackspace are offering better services with easy installation without cable installation and equipment.

How cable distribution business became uncompetitive? 

In simple words, it didn’t happen overnight. These online streaming services have done everything to de-value the features of conventional cable TV in the market. Small TV companies aren’t finding a way to compete against these constantly growing giants. AT&T, Comcast, Century Link, and Spectrum are one some of the few dominating ISPs in the market. They all have collectively pushed almost every small cable company to surrender with their at par services and after winning millions of loyal customers across the country. The only option left for these small companies is broadband internet to keep their business alive in the market.

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Is there anything more to it?

Apart from the above-mentioned reason, the installation and maintenance cost for HFC (Hybrid Fiber-coaxial) is expensive. It decreases the number of competitors in the market because one company that provides the best services under aggressive price tags will enjoy almost all the customers.

How are big companies winning? 

There are few chances that the old ISP will face some issues in the market that gives space for other service providers to compete against it. Big organizations always focus on providing the best value to their customers. They always keep an eagle eye on the constantly changing and growing user requirements. This enables them to improve their services to stay at the top of their game. 

Why competition is so less in the cable distribution business? 

For creating a competitive environment, you have to think out of the box and come up with something new for the customers. If one cable provider is offering 100+ TV channels, you can either give 100 channels at a low price or offer more than 100 channels in the same price tag. Also, some undeniable facts that can’t be ignored include the accessibility of cable services is less. First, it is because of the infrastructure cost involved which is too high for bringing the services from one point to users. Then, no matter how feasible, only a handful of cable operators can function in one region as per the legislation. Therefore, users get some options at their disposal at a certain price and they have no other option but to pay. 

Where is the cable distribution leading? 

Cable distribution and cable service’s survival is a big question and a popular debate in the industry for a while now. This is primarily because of the not-so-recent but persistently leading the trend of cord-cutting and no-cord in the market. Customers are not happy with the price hikes, hidden fee that comes with cable services and the prerequisites that involve equipment and tools to make the cable services function. As a result of this, they are just keeping their internet services as a standalone service. If you are looking for lightning-fast speed on the internet for residential and business use, we would recommend you to check CenturyLink internet. Due to its nature, fiber optic internet is one of the fastest internets in the world, you must read CenturyLink reviews to be certain. Though fiber internet is the hot cake its serviceability is less and still growing to reach the masses. 

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