How do Cable Companies Make Money?

Not too long ago, people habitually watched broadcast networks as the only source of entertainment and advertisements. To catch broadcast TV signals, people had to use antennas on their rooftops but the broadcast service was limited to some specific areas. Therefore, those who didn’t have access to broadcast TV have the option of watching cable TV. Cable TV on the flip side transmits signals through an underground built network of wires but it is a bit expensive. Cable TV displays premium TV channels, which attracts broadcasters to run their services through cable TV as it gets them a better return.

Further in this read, we will share how cable companies generate money and what is the future of cable services. If you are looking for cable or DSL services that are worth every penny and give you the option to get more than one service under one bill, please check CenturyLink

How cable companies make money? 

  • A channel owner traditionally earns money through commercial ads as well as through the monthly subscription fee that the viewers pay. You cannot watch any channel on cable TV (simple or prime both channels) free of cost. Every cable TV subscriber has to purchase a cable TV subscription and pay in time to watch TV channels on cable TV.
  • Cable service providers have more than one option to earn money. If you have purchased a cable TV subscription, you have to pay for all the services you have purchased, equipment, installation, etc. These are the conventional ways that let cable operators generate a handsome amount of revenue. This earned money is shared between the producers, cable companies, and program networks.
  • Besides the obvious charges which include a monthly fee, installation, equipment charges, and other services in the bundle such as internet bundled up with TV or digital phone services, cable companies make money through additional features as well. The additional features may look like on-demand channels, channel line-ups that you don’t even watch, the rental fee for the router or modem. 
  • There could also be some unnoticed charges on your bill such as when you use the internet after consuming the data limits, or any feature that you signed up for and don’t even use anymore. 

Internet Era

With the launch of the internet, there is a mind-blowing innovation in the field of entertainment. The credit goes to the internet that online streaming services have gained more popularity than cable TV services could ever do. Over time, the competition started to intensify in this industry. Today, we see popular broadcast network’s names which include HBO and Disney as the top players in the streaming markets.

Online streaming services provide quality entertainment than Cable TV services at a cheaper price and in large quantity. It has subsided cable by a significant margin due to which it is now facing a decline in its subscribers. Cord-cutting and no-cord are the common trends because the cable prices are considerably expensive as compared to streaming services. 

What is the future of cable companies? 

Given the latest trends where people are more inclined towards alternative options that offer them much more than traditional cable services.  Nowadays, we see that cable TV is trying relentlessly to make a comeback in the field of entertainment. It has launched various bundles and options to create your own bundle where you can enjoy cable TV, internet, and digital phone services at low prices. Moreover, cable companies now let you get standalone services and you get apps without any additional cost so you can stay entertained and informed even when you step out. These strategies can work in favor of cable TV networks as they offer cost-effective options to every paid subscriber.

At present, we see that the internet is the best option when we talk about video streaming. Thanks to the high-speed internet services, which allows you to enjoy endless entertainment. You can download long movies within few minutes. Netflix, Hulu, and Amazon Video are some of the most prominent names in the online entertainment industry.

Final Thoughts

We have tried to cover all the major methods through which cable companies make money, if there is anything that we haven’t mentioned please share it in the comments section underneath. Cable services may be more expensive but there are thrift ways to make it worth the spend and avail the finest services.

Anzhela Sychyk
 

I`m a Market Researcher and Technical Writer at TheAppSolutions. I like to learn new things about modern technologies and share knowledge through value-added content, helping entrepreneurs build businesses in a more effective way.