In the past, networks (i.e., ABC, NBC and CBS) broadcasted signals over the airways that reached televisions with a good antenna. The channels were available to anyone who wanted to watch their advertising, which paid for the majority of the company’s budget. If you lived in area where broadcasts could not reach your television set, you could pay a cable company to bring them to you via a wire. As time went on, premium channels such as HBO, Showtime, etc. arrived on the scene. They offered unique benefits in that you could watch programs without ads – but you had to pay a subscription fee. Fast forward some more, and now cable companies package programs in “bundles.” By doing so, viewers can choose the bundles of channels they want to pay for and cable companies generate revenue two different ways: ads and subscription fees.
Cable TV Providers
While the majority of television viewers watch what cable TV offers, there are very few viewers who enjoy paying their ever-increasing cable bills each month. Cable companies certainly have the upper hand and can charge higher fees because: 1) there are very few options to choose from based on location; and 2) cable companies often provide subscribers with both cable TV AND Internet service – which everyone “needs.”
Towns and cities have contracts with cable TV providers and therefore residents in those areas must use the contracted cable provider or switch to another type of provider altogether. The Big 4 cable companies are Comcast, Time Warner Cable, Cablevision and Charter.
Each company has its own terms, conditions, bundles and options.
Cable vs. Satellite TV
The business model of satellite TV providers is generally the same as cable providers: offer bundles of programming to subscribers for various fees. The difference is how the programming reaches your home. Satellite TV provides for continual network coverage and connection via an antenna and satellite dish.18 Satellite TV providers primarily are subscribed to by families that homes with an unobstructed view of the sky. As with most things in life, the devil is in the details. Review the contracts very carefully!
Cable TV and Satellite TV have their upsides and downsides – and the two industries are fiercely competitive with each other. The installation of a satellite dish and antenna on a property may be prohibited by a landlord or homeowner’s association and inclement weather tends to disrupt satellite service.
It really comes down to price, bundling of services and reliability.21
The incredibly rapid rise of streaming services such as Netflix, Hulu and Amazon video has encouraged many traditional cable TV subscribers to “cut the cord” and watch their chosen programming via the Internet. And, since people can watch their shows on their TVs (via smart TVs, the Roku device, etc.) as well as their laptops, tablets and phones, streaming services have become much more popular.
Even in the case of cord cutting, the cable operators can still get your money as they often provide the Internet service in the first place.