Cable Industry Research Paper

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Cable Industry Final Project Paper
Karen Paterson
Damien Edmondson
Ray Cancino
Eduardo Fajardo
University of Phoenix
ECO 365
Liliana Fargo
October 15, 2008

Cable Industry Final Project

The cable industry since its inception in Pennsylvania in the 1930s has evolved dramatically since then. Starting out as a monopolistic competition it has since been evolving into a perfect competition market, although there is resemblance of each market type, it is closely similar to a perfect competition. In the following content we will analyze the cable industry; some items that will be outlined are the history of the industry, the market structure, regulations and how government regulations impact the industry, factors of cost and production. In addition we will also analyze any issues or opportunities which might arise, global competition, social diversity within the workforce, opportunities due to technological advances and recommendations how to further optimize the industry service. Cable technology was developed and introduced in the late 1940’s in Pennsylvania to provide better reception to customers in mountainous and remote areas that were not satisfied with over-the-air television. The vision for this new technology provided an alternative by improving on the method of sending broadcast signals into the homes while also becoming and entertainment vehicle that offered video, data and voice services. By 1952 there were 14,000 subscribers nationwide. Cable technology was able to pick up distant signals from hundreds of miles away. This allowed subscribers a variety of programming options that would not be available with the standard over-the-air system. Furthermore, with more programming choices and clearer reception cable soon moved into major cities growing at a steady pace. By 1962 the number of cable subscribers had grown to 850,000 nationwide. The government, in response to the voices of theater owners and television broadcasters who felt cable was becoming too big, went forward to regulate the industry during the late 1960’s. The Federal Communication Commission (FCC) placed restrictions on the ability for cable systems to import distant signals. This ruling was only a small bump on the road to slow down cable’s technology. In 1972 Home Box Office (HBO) developed pay television. HBO was the first in the industry to use communication satellites to distribute programming to the consumer. With the amount of money generated form cable soon the restrictions imposed by the FCC at federal, state, and local levels began to decrease. Growth resumed and by the end of 1970 16 million households subscribed to cable. Deregulation of the industry in 1980 brought on positive advancements in services. More channels were continuously added and the industry spent more than $15 billion in wiring and upgrading infrastructure. In addition, billions more would be spent on program development. By the end of the 1980’s subscribers to cable had grown to 53 million. In the 1990’s cable offered broadband networks that were faster than digital subscriber line (DSL) offered by phone companies. This technology provided greater speed to consumers as they used the internet to obtain information. Soon the cable industry offered digital cable which was an improvement on the existing technology. By 2005 subscribers ascended to 92 million. With new services like High-Definition television and video on demand the cable industry continues to expand the limits of entertainment and information that is provided for the consumer. Just as the cable industry has grown and expanded so have their markets. The time of merely getting a weak signal to mountainous areas are long gone, as the digital era comes upon, cable has transcended markets at an accelerated rate. Numerous markets have opened up with the expansion of cable television; moviegoers, sports fanatics, and media enthusiast are only some of the markets in which cable has entered. Most cable...
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