Are you looking for your next investment opportunity? Great, you’re on the right track. Say you’re looking into investing in a cable company, but you’re on the fence. It seems like a good idea in theory, but there’s talk that cable is a losing bet, at this point, and you’re afraid you may be gearing up to make a bad investment. Aren’t people more likely to stream content than pay for cable nowadays?
Well, that may be true, but when you dig deeper, you may discover that there are some hidden bits of information that make the situation less dire. Whatever you decide, you need to look at this from every point of view, so let’s talk a bit about cable companies, how they’re doing, and whether they’re worth investing in.
Cable Companies Are Losing Customers, But They’re Gaining Them Elsewhere
First thing’s first – you’re surely aware by now that the heydays of cable are over. Subscribers are fleeing in favor of becoming cord cutters. Cable isn’t cutting it anymore, and there’s better game in town for those who can’t live without their shows.
That alone would have you thinking that there’s no use investing. However, what most people aren’t paying attention to is the fact that cable companies offer more than just cable. In fact, it’s the very same cable companies whose subscribers are fleeing that are offering the alternative services people are signing up for.
That is to say, what cable companies are losing in cable subs who are leaving, they are gaining in “new” subscribers for their broadband and internet services. For some of these companies, such as Charter and Comcast, there are more new subs for these services than there are leaving their cable subscriptions. They are very much gaining – both subscribers and value.
Other companies weren’t as prepared to make the transition, and they are losing big time, and will probably cease to exist, unless they are able to keep up and make a comeback.
Who’s the Most Competitive Company on the Market?
When you’ve got significant competition on the market, it becomes all about gaining an advantage over other companies. Look for companies who seem to know how to retain their existing customers, as well as attract others.
What makes a company different? What are they offering more of than other companies? What sort of deals are they creating for customers? What is convincing customers to keep their subscriptions?
Some companies have more of this kind of “leverage” than others. The ones that were smart enough to expand into other areas are now able to offer their customers more value or a diverse range of services that they cannot find with another company.
Another way to help customer retention or to keep subscriptions is to make bundles available. Service bundles are packages that offer several services together, at a discounted price. A service bundle may offer a cable subscription, free access to their own streaming subscription, mobile data, etc.
This type of deal makes it difficult to unsubscribe, because if the customer gives up cable, they are also giving up the advantages offered with the bundle.
Unfortunately, not all cable companies are able to do this. If they are limited to just cable services, they are most likely in decline at the moment, and projected to continue to decline. They have no leverage in order to retain customers, let alone attract new ones. They have no competitive edge, so they will end up being swallowed by companies with a more “complete” service package.
Some Companies Are More Flexible Than Others
The companies that will prevail are the ones that are looking at trends and changes in the market. As we all know, customers are cutting the cord, but that doesn’t mean people have lost interest in TV. On the contrary, people are more obsessed with TV shows than ever before, but they’ve simply switched to a different form of consuming media: streaming.
Some companies have had the foresight of hopping on this bandwagon when it was still fresh, and they are now reaping the rewards. While other companies who’ve stuck to a traditional model are now facing losses of millions of subscribers, the cable companies who offer streaming services are gaining subscribers.
Another move that has enjoyed great success is creating new bundles and packages. People are no longer willing to pay through the nose for channels they don’t want. But if companies keep the most popular ones and add their streaming or broadband services, for a smaller price than average, then the consumer is hooked.
Are Cable Companies Worth Investing In?
So, what’s the bottom line? Should you or should you not invest in cable companies? Like in most industries, it depends. Some of these companies are better equipped for the long-haul than others, and it shows in the number of subscribers they’re losing vs. the ones they’re gaining.
A significant number of cable companies are bleeding subscribers, because they haven’t been able to keep up with the trends. They are operating in an old-fashioned, outdated manner and offering services consumers are no longer interested in, at prices they are no longer willing to pay.
On the other side of the coin, we have the companies that were able to build upon themselves and expand into other services to offer their customer base. Whether that’s a streaming service, mobile data, or other advantages, they are the companies that have leverage over other similar companies.
If you go for the latter companies, you are likely to make a very successful investment in a company that will flourish and continue to be profitable for you in the long run. Pick the wrong company, though, and you may be essentially throwing money down the drain. That is why it’s so important to study the market carefully and make sure that you’re putting your money on what is a safe bet.
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