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How Do Cable Companies Make Money?

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Sep 27, 2020

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Nov 29:

[Don't ask me how can I sell more of my product first.
Ask yourself instead how can I improve my product.]

[What happened with #Balenciaga?
It's a pattern.]

[Ένας Ρώσος δισεκατομμυριούχος έγινε ο τρίτος επιχειρηματίας κρυπτονομισμάτων που χάνει τη ζωή του κάτω υπό μυστηριώδεις συνθήκες μετά τη συντριβή του ελικοπτέρου στο οποίο επέβαινε κοντά στο Μονακό ενώ οι καιρικές συνθήκες ήταν πολύ καλές.]. [A Russian billionaire has become the third cryptocurrency entrepreneur to die under mysterious circumstances after his helicopter crashed near Monaco in fine weather.]

[BRICS vs old = 2-0]

economictimes: Eurasian Economic Union explores common payment system with BRICS. According to the media report, citing the EEUs regulatory body, the plan also envisages the issuance of a single payment card within the two trade blocs. That

finance yahoo: Bank of America sees stocks going nowhere in 2023. Roughly a year from today, the S&P 500 will trade at a level little-changed from current levels, Bank of America projects.

[Credit Suisse looking for saviour]

bankingnews: Δυο deals στις τράπεζες που παρουσιάστηκαν ως δεδομένα… και χαλάνε – J P Morgan με Viva Wallet και...
Για ορισμένους η συνολική αξία της Viva Wallet δεν υπερβαίνει τα 700 εκατ ευρώ οπότε το πωλούμενο 48,1% δεν αξίζει πάνω από 350 εκατ και σίγουρα. Two deals in the banks that were presented as facts... and break down - J P Morgan with Viva Wallet and...
For some, the total value of Viva Wallet does not exceed 700 million euros, so the sold 48.1% is not worth more than 350 million and certainly

newstarget: “Science” group spent $40 million censoring free speech on social media
As millions of Americans are struggling just to make ends meet, the National Science Foundation (NSF) under fake

[Switzerland buried gold 🪙]

[280 ακίνητα και €10 εκατ. έχει η οργάνωση του π. Αντωνίου.]. Fr. Antonio's organization has 280 properties and €10 million

[A birdie told me we're going back to 1955 prices (after the STORM).]

[

]

searchengineland: Black Friday sales up nearly 12% from 2021. Spending this holiday season is expected to rise 2.5% from a year ago, compared with 8.6% last year and 32% in 2020.

documentonews: Αποκαλύπτουμε τη λίστα των παρόχων του Predator - Documento. 498 URL, 285 ονόματα, δύο διευθύνσεις και το edolio5.com πίσω από μία διεύθυνση στη διαδρομή της φάκας των παρακολουθήσεων Το Documento. We reveal the list of providers of Predator - Documento. 498 URLs, 285 names, two addresses and edolio5.com behind one address in the path of the tracking lens The Documento

capital: Δέσμευση λογαριασμών 47 ατόμων για απάτη γνωστής ελληνικής εταιρείας σε βάρος της ΕΕ. Ζημία πάνω από 20 εκατ. ευρώ. Freezing the accounts of 47 people for fraud of a well-known Greek company at the expense of the EU. Damage over 20 million euros

[και το ξεσκαρταρισμα μόλις ξεκίνησε] [and the scrapping has just begun]

[

]

[

]

cnn: Irish regulator fines Meta $275 million for violations of Europe's data privacy law. Meta has been fined roughly $275 million by Ireland's data privacy regulator for failing to prevent hackers from siphoning off personal information from more than 500 million Facebook users in a 2019...

[as said... companies that don't respect users]

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Every one of us might have pondered at some point that how these cable companies can make money. In a time of changing TV viewing habits, more competition, and rapid technological changes, big names like Xfinity or Spectrum cable TV are always coming up with better plans and offers at pocket-friendly rates to fight the competition.

There has been a lot of evolution in the television entertainment industry. The premium channels like HBO or Showtime now provide TV entertainment without any ads but might come with an extra cost. Though streaming services seem to have created much hype among the users, cable TV still remains to have a sound place and has millions of subscribers across America. 

How Do Cable Companies Make Money?

The Beginning

In the beginning, the broadcast networks used to transmit entertainment content along with advertisements for those who wanted to watch them. Antennas were used in order to watch broadcast TV channels. However, those who lived in areas where the broadcast signals did not reach, could pay a monthly fee to a cable company in order to access those channels through the wire.

2 Options

With the advent of premium channels, the broadcasters ultimately agreed to send their shows over the cable. The channel owners had two options for generating good revenue-they could either rely on the ads or the subscription fees. These subscription fees are collected from the users by the cable operators who would provide access to the channels in the form of cable TV packages or bundle offers.

Cable operators

The cable operators on the other hand also have multiple options for getting paid. Users pay rent for the set-top boxes, the packages they buy, or the local ads that we see while watching the channels. The revenue generated breakdowns among the cable companies, program networks, and program producers.

Internet era

Things were running quite smoothly in the entertainment industry until the internet came into existence and took over the world by storm. New companies kept budding and with time, the online streaming trend gained impetus. Nowadays we see big names like Disney, HBO, and Apple being a part of the streaming war.

So cable TV has experienced a loss in terms of revenue and subscribers. But cable companies bounced back by rolling out bundle deal offers where you can bundle up cable TV, internet, and phone services at discounted rates. The bundle offers are more popular among subscribers since they are more pocket friendly and offer the convenience of managing everything under one bill.

In the beginning, the internet was not very popular in terms of video streaming. But recently there is much to watch and the improvements in internet speed have led to better TV watching prospects. Streaming shows online or downloading video content is a matter of seconds. Netflix, Hulu, Sling TV, Amazon Video, and others have accelerated the cord-cutting trend by promoting TV over the internet.

Thus the cable companies observed a serious setback in revenues, especially in the last decade.

Revenue decrease

Another factor involved that has resulted in a decrease in revenue generation for cable companies is that users want to avoid the channels they don’t watch. People realized the fact that they are often paying for TV channels they never watch. For instance, ESPN has a 3 percent cable audience on the whole but is paid around an 18% share of cable subscription fees. Fox on the other hand engages 13% cable TV audience but receives only a 3% share of cable TV subscription fees.

%

ESPN percentage of cable audience

%

ESPN subscription fees share

Stability

There is another side of the story. Cable companies have cracked the code of maintaining a stable position in the industry and compensating their dropping revenue. Most cord cutters that abandon the cable TV subscriptions do not quit the cable provider. The reason is that most cable companies offer cable internet services needed for accessing any online streaming service.

Thus cable companies are not left empty-handed as their subscribers are still paying for the subscribed cable internet services.

%

Fox percentage of cable audience

%

Fox subscription fees share

The bottom line

Cable companies make money mainly through advertisements and cable fee subscriptions. The new online streaming trend has affected their business but the cable companies still manage to compensate for the loss by generating revenue through cable internet services mandatory for internet-connected TV.

No doubt the TV watching trends are changing and in the near future, we might see a greater shift in TV watching habits with internet-connected TV being even more popular.

Frank Wright

Frank Wright

Content Strategist and Digital Analyst

Frank is a proficient writer with a strong grip on the concepts of marketing, technology, design, and lifestyle.
His articles have been featured on well-renowned properties. In his spare time, he likes to read about the latest trends pertaining to the digital industry. You can find him on LocalCableDeals.

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