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    Posted April 11, 2012 by
    LenGrace
    Location
    Tupelo, Mississippi
    Assignment
    Assignment
    This iReport is part of an assignment:
    Tech talk

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    Cable Rates Continue Rise: Not Sustainable For Mainstream Viewers

     

    Recent studies have cable rates on a continuing rise as operators take advantage of their large customer base to stay abreast of those looking for a piece of the cable pie. Factor in annual increases to meet business expectations, and the rising cost of programming, current rate trends are not are not practicable going forward. This strategy is neither sustainable, nor advisable as a long-term solution to continued profitability. Mainstream viewers will continue seeking alternatives. Rate adjustments have been a legacy of the Cable Industry for decades and have funded some important milestones, including HFC (Hybrid Fiber Technology) and Docsis 3 to drive consumer penetrations forward. See (By the numbers: The spiraling cost of sports programming)

     

    Boston Moves to Recertify Rate Regulation

    This week the FCC moved to recertify Boston, MA to regulate Comcast due to insufficient competitive forces within the market. RCN, who was once believed to be a major and potential competitor for Comcast came up short in building the infrastructure to effectively compete, passing only 32.1% of that market. With no plans or agreements with RCN to increase that market penetration, Boston’s governing leaders filed with the FCC to overturn the effective competition rule. Deregulated in 2001, the filing would bring back rate regulation to the city.  The issue is over basic cable rates which only involve limited and off-air programmers, not premium programming.  See (Boston wins authority to control cable fees)

     

    Rising Program Costs Beget Rate Increases

    Rates are on the rise, with ESPN leading the way in driving up programming costs, demanding coverage on less expensive packages which reach most consumers, and insisting on multi-channel carriage of its products. Add broadcasters to the mix, hitting the cable industry up for high retransmission fees for carriage licenses which all must be factored into over-head costs to deliver a package of services. Cable is being squeezed to comply with its controversial alternative, raise rates to offset those rising costs in protecting its business model. See (Pay TV costing a pretty penny, and rising)

     

    No Longer a Sustainable Model – Long-Term

    The business model which sustained the cable industry for decades, spawning a multitude of successful channels both diversified in genres and demographics, is being threatened by the very partners it created, slowing picking at the giant’s revenue model leaving it to fade away as new technologies take hold in video delivery. When will the dam break creating a flood of defectors to IPTV service providers who have innovated new products that connect consumers with programming, easily and seamlessly at reasonable costs? That question is yet to be answered, but sooner rather than later, if adjustments are cannot be made.  (The NPD Group: Average Monthly Pay TV Subscription Bills May Top $200 by 2020)

     

    Broadband: Answer to Cable Industry Woes

    Cable Industry executives have created a sustainable pipeline for connecting their customers to video programming. Their broadband services are the best in the industry, providing a fast, efficient, and affordable highway in which consumers can connect with all programming needs the cable industry built. It must continue its innovation and evolution of TV Everywhere as a serious alternative service, one which will compete with other OTT (Over-The-Top) video providers. It provides the realistic opportunity for cable to transition itself from a dinosaur to the new kid on the block.



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