search cancel

How Will You Adapt to New Competition as an Established Business?

By the time 2017 came to a close, more than 22 million had ditched their cable or satellite TV providers. This number — which leapfrogged previous estimates of 15 million cord cutters — signals that Americans are developing new viewing tastes and adopting new methods of watching their favorite TV shows and movies.

 

In fact, eMarketer predicts the number of people who’ve never paid for cable or satellite will match the number who have abandoned it by 2021, meaning 30 percent of Americans won’t have either. A 2017 report by The Diffusion Group offers a more dire prediction for 2030, indicating only 60 percent will have pay TV.

Social media, online videos, and over-the-top services have invaded the viewing market, offering stiff competition to cable providers hoping to keep their longtime customers. With the average American paying $103 per month for cable, how will the platform survive?

Experts have wagered a few guesses as to how cable TV will overcome the immense hurdles facing it.

  1. Cable will monetize its programming.

Illegal downloads and streams of movies and TV shows have hit everyone hard, not just cable providers — streaming services are expected to lose more than $50 billion to pirates in a six-year span. Vince Gilligan, the creator of “Breaking Bad,” admitted, “If I’m being honest I see that the illegal downloading led to a lot of people watching the series, becoming aware of the series who otherwise would not have been…I see that in some ways illegal downloading has helped us, certainly in terms of brand awareness, so that’s a good side.” Torrent-fueled viewings certainly help cable networks and providers as much as they harm them.

But such piracy signals a need for monetizing TV beyond publicity. Home services comparison site InMyArea believes cable networks can incentivize viewers to engage with their content through legitimate providers by creating Spotify-type platforms. These platforms, designed to function like normal TVs, would enable networks to feed related content to viewers and push them to engage with other viewers on social media.

  1. Cable will join the digital fray.

Some cable providers have already adopted the practices of their digital brethren, creating their own streaming options for subscribers; one example is DirecTV’s DirecTV Now, which offers more than 100 channels for a much lower price than DireTV’s own satellite service. Randall Stephenson, the CEO of AT&T, which owns DirecTV, aims to lose its traditional satellite customers to the brand’s own streaming service rather than lose them to competitors.

While digital options allow cable and satellite providers to eschew the bulky hardware of the past, they also enable providers to continue bundling services for consumers. Those who prefer paying one bill for internet, TV, and phone services will stay with their providers and likely receive discounted pricing as a reward for their loyalty.

  1. Cable will capitalize on its access.

One major downside of streaming and OTT services is that they don’t offer the comprehensive channel list cable providers do. Cord-cutting consumers often vent about the frustration of trying to find a specific TV show or movie among their host of streaming services, sometimes resorting to buying an entire season of a series in order to watch it (and negating their savings at the same time). Channels, individual shows, and studios have all struck deals with different service providers, meaning each streaming or OTT platform typically offers a limited menu to accompany its smaller price tag.

Cable companies could make deals that further limit their competition’s access to shows or movies by buying exclusive rights. This would keep safe their competitors’ original programming, but some are already rattled and fighting back: Netflix, for example, is pursuing exclusive rights to TV shows, movies, and even creators. Vox’s Todd VanDerWerff pointed out that cord cutting is getting more expensive as consumers pay for different services with different programming, predicting cable companies will win the streaming war over platforms like Hulu.

Cable has certainly been put through the wringer in recent years, but that doesn’t mean behemoth cable companies won’t even the score. With cable providers putting their massive resources behind the creation of a future that includes them, cable is primed to adapt to its competition.

Author : Holly Hutton

Born in the Big Easy and raised in the Sunshine State, Holly has spent the last five years brunching in the Big Apple and bantering with Big Ben. As a wandering writer, techy-in-training, and avid alliterator, Holly has written everything from educational policy and political news briefs to web content and travel blogs. She is thrilled to be a part of the KS team and working with a community of smart, savvy, entrepreneurs on all things startup!

Share This Post On