The Future is Satellite TV - the Question of Cable vs Satellite TV has been solved

By: Dave Neville | Posted: 08th June 2010

The decline in the market share of cable TV is slow but continuous. In a market of a constant size, any increase in the share of one product inevitably means a loss of market share in another. In the case of the TV industry, the increase in market share of satellite TV systems means there's a decline in cable TV.

Cable TV was originally seen as a means for isolated country areas to experience the television benefits then being enjoyed by city dwellers. From a slow beginning in the late 1940s it developed into a huge industry by the 1990s influencing the lives of many people. By the end of the 1990s, it was estimated that approximately 70% of American homes had access to cable TV.

However, the mid 90s saw the introduction of satellite TV and the start of the decline of cable TV. The satellite TV providers made a very aggressive assault on the TV industry and very quickly had gained a large slice of the market. Since then the position of the satellite companies has got stronger at the expense of the cable companies.

While cable delivered a signal to each home via an underground or overhead cable, the signal for this new innovation came from fixed satellites located over the Caribbean Sea. Reception at each subscriber's premises was through a small circular dish usually affixed to the roof of a building. As long as the dish had an uninterrupted view of the southern sky, a TV configured correctly would be able to display a perfect picture and sound.

Like cable TV, the satellite TV packages are available through a monthly subscription and a contract. Most of the channels shown on cable are also available with the satellite companies, so a family switching over to satellite TV from a cable TV provider will still be able to enjoy their favorite programs.

The rise and rise of the penetration of satellite TV into American homes has come at the expense of cable TV. Cable TV is on the decline at an ever-increasing rate, and although its demise may be some time away, it will eventually happen. Not only is this an example of superior technology replacing inferior technology, the downfall of cable TV is being accelerated by the overtly aggressive promotion policies of the satellite TV providers.

So what are the problems facing the cable TV industry? These can be divided into two - firstly the technological problems, and secondly the threats from aggressive satellite competitors.

Technological Issues facing Cable TV
1) As the TV signal is delivered via cable, bad weather conditions may affect transmission. Cable TV is not as reliable as satellite on this score.
2) Cable cannot handle the much larger number of channels that satellite transmission can. Cable just cannot match satellite when it comes to variety of channels on offer.
3) The nature of satellite TV means it's easier to incorporate new technologies into the system.

Threats from Aggressive Competitors
1) As the satellite companies are chasing market share, they are keeping their subscription fees as low as possible. The cable companies' fees have been increasing at a greater rate than those of their satellite competitors.
2) Both the major players in the satellite TV industry offer new subscribers free equipment and installation, such as a satellite dish, set-top equipment etc.
3) The installers of the satellite systems offer a range of free gifts, with the satellite companies offering special deals and prices for new customers.
4) Numerous industry surveys point to satellite TV companies placing greater emphasis on customer service than the cable operators.
5) The ever-increasing number of subscribers to satellite TV is in itself encouraging families to switch over.

In the past, cable TV has been at the forefront in providing the American public with the latest in technological improvements. However the advent of satellite TV has had a similarly adverse impact on cable TV. Unless the cable TV companies can match or better the technological advantages enjoyed by their satellite competitors, then their demise will be final.

About the Author
The author, Dave Neville, has an interest in the satellite TV industry and writes for a website that gives basic and easy to understand facts about this entertainment medium. It includes a look at the comparison of cable vs satellite TV. The website also gives information to allow a subscriber to compare dish TVproviders.
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Tags: market share, satellite tv providers, demise, decline, 1940s, 1990s, cable companies, city dwellers, tv cable, tv industry, satellite companies, southern sky, mid 90s, caribbean sea, tv packages, cable tv provider