Cable vs. Satellite TV Essay

 


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Nowadays, the competition between cable and satellite TV becomes more and more severe and obvious. Many companies, representing different ‘philosophies’ are struggling for one and the same niche of the market that naturally contributes to the progress of quality of services suggested by competitors and, finally, it permits to average people make a conscious choice in favor of the best. On the other hand, we may speaks seriously about several companies as the most significant players on the market of satellite and cable TV, among which two companies may be singled out, namely Comcast Cable and Direct TV. Actually, both of them are leading companies in their niche, the former (Comcast Cable) is among three the most powerful cable TV companies, and the latter shares the first place with DISH Network among satellite TV companies. Many specialists indicate that the tension in struggle of these companies for bigger share of the market will permanently increase and some even predict the disappearing of cable TV though it would be quite arguable point if taken in the nearest prospect. All these facts make it very interesting to analyze the current situation and prospects of Comcast Cable and Direct TV.

First of all, it is necessary to underline that these two companies represent so to say two different epochs in technological and economic senses and have different starting points because satellite TV, represented by Direct TV as a major player on this segment of the market, is relatively young in comparison with such dinosaur as Comcast Cable which began to develop its network much earlier. However, specialists underline that in our days “among alternative systems that offer competition to cable, direct satellite broadcast system [like Direct TV] are the principal subscription competitor" (Gomery 2000:199). Also, taking into consideration some facts from the process of development of both Comcast Cable and Direct TV will be very useful for the analysis and understanding of the current situation and prospects of both companies. At the beginning it seemed that two companies do not intersect in their work for, initially, they were clearly divided by their customers’ place of residence.

For instance, Comcast Cable, as well as other cable TV companies, worked mainly in urban and suburban areas while rural areas remained uncovered by cable network. Exactly this niche was filled by Direct TV services in first turn as the result one could presuppose that these companies could simply share their clients by geographical principle. But, unfortunately for Comcast Cable and fortunately for customers, the competition between two companies began to increase because they began mutually expanse their influence in all areas and overcome frontiers existing before. As a result Direct TV began to promote its services in urban areas while for Comcast Cable it became technically possible to spread its network to rural areas, remarkably due to satellite technologies. Such a trend really shook the positions of Comcast Cable which together with other cable TV companies occupied the dominant position on the market though technological, economic and what is not less important legislative changes lead to the rapid development of direct satellite broadcasting systems among which Direct TV was one of leaders. What can be observed now then on the market? When such companies as Direct TV appeared specialists marked a tendency to the growing demand of better quality from the part of the customers of cable TV companies, including Camcast Cable, particularly after the Communications Act 1984 when “cable rates to subscribers rose rapidly and numerous complaints emerged about service quality", moreover, “almost two thirds of video subscribers were choosing DBS [including Direct TV] over cable" (Johnson 1994:234).

So, it would be logical to presuppose that Direct TV and other satellite TV companies suggested something that was really much better than traditional cable such as Comcast Cable. At this point it is necessary to compare briefly what these two companies suggest to clients and that would probably help understand why such a shift in customers preferences takes place even now. Actually, Direct TV has a number of advantages compared to Comcast Cable. Among such advantages may be named better picture and sound quality. Furthermore, it has theoretically unlimited capacity “as of March 2002, Direct TV provided access to more than 300 channels of combined video and audio programming" (Goolsbee and Petrin 2002:318). Finally, its services are often cheaper than services of Comcast Cable, for instance, Direct TV service basic packages are priced about $31,99-35,90 while those of Comcast Cable – 37,64. As a result these advantages enable Direct TV “to attract former cable subscribers and customers not previously subscribing to multichannel service" (Carlin 2000:174).

This trend indicates the prospects of further development of the market but it does not mean that the position of Comcast Cable is so dramatic and weak.

On the contrary, in 2001 cable passed more than 90 percent of all households in the US (Goolsbee and Petrin 2002). It means that the position of Comcast Cable remains quite strong and it is not so desperate as one may think. Furthermore, it has one very serious advantage compared to Direct TV “in the potential fiber-optic services because cable already passes more than 90 percent of the nation’s homes with broadband facilities" (Johnson 1994:202) and according to market research of Goolsbee and Petrin (2002), nearly 39 percent of all cable/satellite TV households reported that they would consider bundling all their communication services that, taking into consideration a large customer base that Comcast Cable already has, gives certain advantages to Comcast Cable in the struggle for customers.

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Thus, taking into account all above mentioned, it is possible to conclude that Comcast Cable and Direct TV will continue to compete and it is very hard, if possible at all, to predict the winner. At the same time, it is obvious that technologically Direct TV seems to be more advanced and its price policy is probably more tolerant and attractive to customers. On the other hand, Direct TV does not have such a strong basis and experience as Comcast cable has that will certainly give the latter a chance to retain its leading positions on the market though, in all probability, in the future its position would be seriously shaken by Direct TV, for it has all possibilities to promote its services and attract more clients. Finally, it is an average customer who wins from such competition between Comcast Cable and Direct TV.

Aaron is a professional freelance writer at custom essays writing service: custom-essay.net He is also a technical writer, advertising copywriter, & website copywriter for Custom Essay Writing Service.

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