Due to rising demand for extended programming options, the price of cable and satellite TV services will increase further in the next three years, although the rate of price growth will be limited by the rising popularity of substitutes.
Los Angeles, CA (PRWEB) March 13, 2015
Cable and satellite television services have a buyer power score of 3.1 out of 5, indicating moderate negotiating power for buyers. During the past three years, prices for these services have risen primarily due to higher demand for upgrades added to existing service plans. “Increasing per capita disposable income and corporate profit have bolstered demand for extended programming, even as the total number of service subscriptions falls,” says IBISWorld procurement analyst Deonta Smith. “Prices are expected to continue increasing over the next three years, albeit at a slower annualized rate as the rising popularity of substitutes like streaming TV services subdue price growth.”
High market share concentration also hinders buyer negotiating power in the cable and satellite TV service market. High barriers to entry and substantial capital investments required to operate a cable or satellite TV service company make it difficult for new firms to enter the market, reducing competition among existing suppliers. This factor makes it difficult for buyers to leverage other vendor options to obtain lower rates. “Large firms also undermine potential competitors by engaging in below-cost pricing practices, whereby suppliers offer internet, phone and cable TV services for less than the price of standalone TV services,” adds Smith. “Additionally, buyers located in noncompetitive regions served by only one or two distributors are forced to purchase services from those suppliers.”
Despite these combined market conditions, buyers benefit from a low level of specialization, which allows them to easily compare programming options across all available vendors and purchase from the supplier that best suits them. As a result, most operators can meet the needs of any buyer. In addition, because services are standardized, when one provider lowers their prices or offers new service options, other providers are quick to follow. For more information, visit IBISWorld’s Cable & Satellite Television Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of cable and satellite television services. Suppliers in this market provide cable television programming through cable or satellite connections to a wide range of buyers, including residential, commercial and hospitality establishments. Cable and satellite TV services are offered by large and small cable and satellite communication distributors, including resellers. This report does not include satellite and earth communication systems services.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.