Friday Oct 22, 2021

Cable TV Companies: Good Business Model, But Is It a Future-proof Market Winner?

The other day, I was talking to a guy who was a coach for the local cable company. As you probably know, the people who install cable services really need to know a lot to get the job done, and training and a learning period are needed to ensure quality and technician success. My acquaintance noted that since his cable company no longer has a monopoly, and there is new competition in town, many of his company’s technicians have been hired by the other.

Still, each company has different systems, and the facilities work slightly differently. Often times these technicians are independent contractors and will go to work for the other company for a time, quit, and come back. This provides the first cable company with good competitive intelligence, and it is much easier to rehire someone who has already been trained, then the expensive training and trial period to get you up and running if you are new.

Some might say that the cable industry has certainly had a hot streak here in America, and most of that is due to special treatment, barriers to entry, and good friends in government who have simplified the laws in their favor. . Still, there is competition from cell phone networks and Internet television services. Right now, they can’t really compete due to bandwidth problems, but in the future they will be able to send more information faster, they will solve those problems. Therefore, many consumers are unhooking, they are cutting the cable line, so to speak.

Still, cable companies are generally better priced and have been bundling services such as providing Internet services through cable, telephone service, and also television. If you have one of those, chances are you’ll go for the included service, which could even include Wi-Fi in your own home. In fact, my acquaintance and I also talked about what Google was doing in Topeka, Kansas, with the extremely fast Internet service that could also provide voice communication, television, and the fastest Internet on the planet.

Will it be able to compete with the future of 4G technology or even 5G wireless technology? Each technology competes on its own merits and for its price. Every new technology is disruptive, but cable companies have a good thing and seem to claim they are recession-proof. If someone has lost their job and is spending a lot of time at home, watch more television. When people have jobs and good income, they ask for the premium service with more expensive bundled services with all channels. Either way, the cable company makes money, or so they say.

Many industry analysts believe that cable TV companies are somewhat recession-proof, but nothing is guaranteed as technology is increasing rapidly and there is so much disruption in the world of high-tech communications, who knows, just time will tell. In fact, I hope you will please consider all of this and think about it.

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