A lack of Competition among cable companies is blamed in the statement for the exorbitant costs consumers continue paying for television service. The absence of Competition in the cable industry has resulted in prices that have refused to come down. Providers have less incentive to cut costs when there are few competitors for cable access in a specific location. Due to the absence of alternative providers, cable companies may charge exorbitant rates without losing many customers. This issue has been worsened by the proliferation of low-cost streaming options (Rennhoff & Serfes, 2020). Many people are ditching their cable subscriptions in favor of streaming services like Netflix and Hulu because of the convenience and savings they provide. If cable companies anticipate a steady customer base or expect to profit from offering internet and phone bundles, they may need to be more inclined to reduce their pricing dramatically.
Streaming services have fundamentally altered how consumers watch television because consumers have limited cable service choices, and suppliers may be less motivated to cut rates—for instance, cheaper streaming services. Many consumers are migrating to streaming alternatives, which are cheaper and more flexible than cable. Cable companies may be less inclined to decrease rates if their client base is steady or they can earn cash from other services. A movement toward streaming services has occurred due to their flexibility and price savings (Goolsbee & Petrin, 2022). The option relies on your entertainment and TV demands and priorities. On-demand watching, a plethora of content choices, and generally lower prices are just a few of the benefits offered by these services.
Nonetheless, consumers should weigh their tastes for TV shows and other forms of entertainment when deciding between cable and streaming. While cable may still be the preferred medium for some viewers due to its reliability and abundance of live content, streaming services have gained popularity due to their low prices and increased portability. In conclusion, the lack of rivalry among cable providers and the introduction of more affordable and flexible streaming alternatives continue to contribute to the high pricing of cable television services. Increasing rivalry in the cable industry and pressuring service providers to provide lower price structures might be one solution to this problem. The decision between cable and streaming should be made based on personal taste, viewing habits, and financial limits.
A few months ago, I made a purchase that has taken me on a wild ride through shifting tastes and competitive landscapes. Of the many options available, I settled on sneakers because of their affordability and ease of wear, but I did not want any old pair. However, the peace I had after making my purchase was short-lived. The identical sneakers I had just bought were featured in a social media post by a well-known influencer (Economides, 2021). Suddenly, the shoes were everywhere, and their popularity and demand skyrocketed. They sold out in a flash, leaving enthusiastic customers waiting for restocks. The twist came when the sneakers were ultimately rereleased. Because of their sudden popularity, the price had skyrocketed. Many long-time buyers were dismayed by the decision, particularly those who had purchased the product due to its low price. The shoes went from being a rare find to a status symbol overnight. However, a formidable new rival soon appeared. They provided a similar sneaker with higher quality materials and a far cheaper price tag. This new entrant caused a stir among price-conscious shoppers because of the disruption they caused in the market. Those turned off by the genuine brand’s price increase may find solace in this knockoff, which was virtually the same product but with additional perks and a more wallet-friendly price tag. My experience with these shoes ultimately proved consumer preferences’ volatile nature and influential people’s power in shaping market success. What is popular now may be different from the next day, and that is okay since markets are constantly changing and adapting to meet customers’ needs by providing them with more options and better prices thanks to intense Competition.
References
Economides, N. (2021). The economics of networks. International Journal of Industrial Organization, 14(6), 673–699. https://doi.org/10.1016/0167-7187(96)01015-6
Goolsbee, A., & Petrin, A. (2022). The Consumer Gains from Direct Broadcast Satellites and the Competition with Cable TV. Econometrica, 72(2), 351–381. https://doi.org/10.1111/j.1468-0262.2004.00494.x 159951&*nn
Rennhoff, A. D., & Serfes, K. (2020). Estimating the Effects of a la Carte Pricing: The Case of Cable Television. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1085392
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