Media Buying and Inbound Marketing Blog

Why Are Cable Fees So Expensive?

By Jane Peters on December 10, 2014 |

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The growing trend in America is to unplug from the cable box and start streaming video.  As of Sept. 30, Time bussfeedWarner Cable had 10.8 million household video subscribers, down from 11.4 million a year earlier.  

This trend is not only hurting the bottom line of cable companies, but traditional broadcasters have lost 3% of their audience this Fall alone. With the growth of Netflix, Amazon Fire, Hulu and a multitude of other online streaming services, people are watching a lot less traditional broadcast television. 

More viewers are opting out of the cable bundle. Most say it the high cost of cable that pushed them into streaming, but many like the freedom to view programs on their own schedule. A personal TV binger, I would have to admit I fall into the latter.

What does this mean to advertisers?  As prices rise and audiences shrink ,marketing strategy is changing. More advertising plans are looking at digital options to optimize their advertising dollars. Inbound marketing will play a bigger role in marketing strategies for not only small businesses but mega brands as well.

As more consumers sign on to streaming offerings such as Netflix, Internet speeds have become important when choosing a broadband provider.

Companies like Time Warner Cable Inc. have seen competition from telecommunications services like Verizon, which touts its fiber-optic technology and higher speeds.

Comcast struck a deal last month with Netflix to grant the streaming-video company more dependable delivery of shows and movies for an undisclosed price, ensuring the cable company could continue to be a middleman between viewers and video creators.

Netflix just announced they will be providing more original programming in the next year.  Monday, the company announced a new plan to roll out up to 20 original series or seasons of original shows per year. Netflix chief content officer Ted Sarandos said the company's five-year goal is to premiere a new show or season every two-and-a-half weeks. 

What is causing the increase in cable fees as subscribers fall?  Many believe it is the high cost of sports programming.  Deals with the NBA and NFL cost a bundle.  

There are others that blame the traditional networks for the increase as they are charging higher rates to cable companies to broadcast their programs, even though they have fewer viewers.

Whatever the reason one thing is clear.  The internet has changed the way people view programs.  Just as the music industry was impacted by online listening, TV stations will have to learn to adapt.

Are you a cable subscriber?  Have you considered cutting the cable cord?

At Media Management Services, Inc., we continually pursue the latest developments and trends in the marketplace to implement your marketing goals. We develop integrated 360 media plans that leverage both traditional and digital channels.

We provide a full range of services across multiple platforms. Whether buying TV and radio time or designing an inbound marketing campaign or developing asocial media strategy, we help you create a consistent message. We're not just another advertising agency - we're an extension of your company.

We're an in-depth media business providing multi-faceted services for all your campaigns. By skillfully blending advertising, promotions and public relations services, we provide you with the edge you need to succeed.

Learn how you can maximize your advertising dollars and increase your share of the market.

Contact Us Now!

 

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