January 7th, 2014
A recent profile by Bloomberg News on “cable cowboy” and billionaire Mark Robichaux, revealed the secret and long-held fears of many cable-providers: they know their near-monopoly on providing television is at an end, and the idea of raising rates to make up for the losses is never going to cut it.
Robichaux essentially explains that poor business practices have caused cable to become less and less competitive, and cables attempts to make the revenue up (by charging for phone etc…) simply won’t last.
“Changes in the cable industry that may reward scale combined with the availability of inexpensive debt make cable an attractive place to do deals,†Chris Marangi, a portfolio manager at Gamco Investors Inc., said in an interview.
Consumers are going wireless, aka “cutting the cord”, and wireless providers and satellite providers like Dish Network are the perfect replacement for old-school cable for many customers.
Even ESPN has been looking past classic cable providers. In a recent New York Times piece, it was speculated that the Disney company was actively looking for other providers so as to stay competitive with brands that are moving away from older systems.
Cable companies have simply gotten too comfortable with their monopolistic position in the past. They’ve overcharged their customers, and then doubly over-charged them once they lost revenue to satellite TV providers like Dish, among others. Consumers will continue to look to Dish Network for competitive rates while cable scrambles to catch up with the times.
Categories: Channels & Shows