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The Broadcasting Industry
Transcript of The Broadcasting Industry
Many consumers are buying internet service by itself vs. the typical cable/internet bundle
The CEO of Charter Communications, told Wall Street that he was "surprised" that 1.3 million of his 5.5 million customers don't want TV
Cutting the Cord
Why the Change?
Consumer sentiment is shifting towards on-demand programming
Cable costs have been increasing
expanded basic service: $61.63 (FCC report June 7, 2013)
basic service + the most subscribed cable programming service tier
Netflix and Hulu Plus: $7.99
Cable is no longer being viewed as the preferred way to watch things that were broadcast on television.
The internet has opened the door for companies such as Netflix, Hulu and Redbox Instant which offer something called streamed media.
Streamed Media is multimedia that are constantly received by and presented to an end-user while being delivered by a provider.
This allows you to watch your favorite shows and movies on any device any time you want.
Control most of the infrastructure
Still hold most of the market share for video
Team 9: The Business Insiders
Pay TV industry share of video market
Cable companies aren't changing how they run their business
Pay TV could become a break-even or negative business in less than a decade
Improve on what they have
More capacity for its cloud-based digital video recorder
Beefing up its video product with more on-demand offerings
Currently the number one source for video streaming with 89 percent of television streams.
Has 29.93 million paid viewers
The stock price is $359.77
Hulu is a distant second at 10 percent SVOD.
Owned by Disney, Comcast and Newscorp
Put up for sale at the end of last year
Moved up from 1.1 percent to 2.41 internet traffic use
Third with 2 percent of SVOD.
Has a market share of $365.28 (not a complete result of Prime)
The part of amazon that is streaming is called Prime
Prime is not only video streaming, it also has other components such as free 2-day shipping of select Amazon products and more.
In 1969 an estimated 500 million people around the world tuned in to watch a man walk on the moon.
A crowd gathers to watch on a big screen at the Kennedy airport.
How to Answer This Change
"I have a dream" delivered in 1963
JFK assassination in 1963
Planes hit the World Trade Center in 2001
Television in Today's World
We went from:
VHS to compact disc
radio to television
Cable to streamed media
Porter's 5 Forces
Bargaining Power of Buyers
On the rise with all of the new alternatives on the market.
This affects the marketing strategies of the competing firms.
Gives buyers more options and better deals.
Bargaining Power of Suppliers
Over time has gone down because of all the new entrants to the market.
The cable company has to compete for customers.
The cable companies must change marketing strategies in order to retain customers.
Threat of New Entrants
Companies such as Hulu, Netflix, and others are relatively new to the market.
They are causing a shift in the industry and giving new options to buyers.
Threat of Substitutes
Online streaming is the main substitute on the market.
With the many options offered customers are more likely to add Netflix to their viewing options.
Rivalry Among Existing Competitors
Companies such as DirecTV and Dish Network have been competitors for years.
Progression of TV options
Local cable company
RAMACHANDRAN, SHALINI. "A Cable TV Exec Considers a Future That’s Online and On-Demand." A Cable TV Exec Considers a Future That’s Online and On-Demand. The Wall Street Journal, 23 Aug. 2013. Web. 17 Oct. 2013.
RAMACHANDRAN, SHALINI, and THOMAS GRYTA. "Cutting the Cable Cord and Getting 'Phone TV'" Cutting the Cable Cord and Getting 'Phone TV' The Wall Street Journal, 1 Nov. 2013. Web. 3 Nov. 2013.
"Commission Document Print Email." Report On Average Rates For Cable Programming Service And Equipment. N.p., n.d. Web. 08 Nov. 2013.
Edwards, Jim. "Cable TV CEO Is 'Surprised' That 1.3 Million Of His Customers Want The Internet But NOT Television." Business Insider. N.p., 5 Nov. 2013. Web. 20 Nov. 2013.
Peers, Martin. "Our Cord Cutter Suffers Relapse, Pines for Cable TV." Wall Street Journal. Wall Street Journal, 12 Nov. 2013. Web. 20 Nov. 2013.
Stephens, Mitchell. "History of Television." History of Television - Mitchell Stephens. Grolier Encyclopedia, n.d. Web. 24 Nov. 2013.
Roberts, Jeff John. "Pay TV Will Shrink for First Time in History, Study Says Cable Watching Peaked in 2011 — PaidContent." PaidContent. N.p., 11 Jan. 2013. Web. 08 Dec. 2013.
Cable Industry Analysis
Marketing through Porter's 5 Forces
In the past only one choice available
Many new alternatives: Satellite TV, Internet Streaming, etc..
How this is affecting the Broadcasting Industry