Should Cable TV Rethink Its Business Model?


Should Cable TV Rethink Its Business Model?

Nielsen Research Shows Americans Watch Only 9% of Their Cable TV Channels

By Grace Margaretha, Contributing Writer

“Quality, not quantity.” This quote may be rather clichéd, but there’s truth in its message. People want good content, not just a large variety to choose from. People enjoy variety, and, according to Dan Rayburn of the business consulting firm, Frost & Sullivan, the large assortment that Cable TV offers is a key factor in its success. The average American household can now select from 189 different channels as opposed to the 129 offered in 2008.

However, according to research done by Nielsen, consumers don’t seem to need that many choices. Results from the conducted surveys reveal that, out of the 189 channels offered, only 17 were actually watched. That’s less than nine percent, 8.99% to be exact! Cable TV companies have been adding more and more channels to give their consumers variety at increasing prices, but this actually seems to be the opposite of what consumers really want. In fact, a recent survey performed by deal aggregator TechBargains.com reported that more than 80% of Cable TV consumers deem their cable bills too expensive.

According to market researcher The NPD Group, the average American pays more than double the amount they paid 10 years ago for their monthly Cable TV bills. These monthly bills are expected to continue rising to $200 by 2020. With competition like free online streaming, the US pay-television industry has lost more than 250,000 video subscribers. This large decrease in subscribers indicates how Cable TV producers need to consider consumer preferences more often. Whether they will actually do this is another question. – Source:  Marketwatch, 05/08/14.