While it has only been a few years since the former video rental giant, Blockbuster, filed bankruptcy; it seems that TV based cable companies are headed in the same direction. With the rise of online streaming companies like Netflix and Hulu, cable companies’ viewership has declined substantially. This is occurring for two reasons: because online streaming companies can offer consumers benefits that cable companies cannot, and because cable companies are failing to address their opposition effectively. The primary reason that online streaming companies are prevailing over cable companies is because of their more affordable price. While both types of companies can offer access to television shows, online streaming companies can meet the same consumer demands at a lower price. For example, the online streaming company Netflix offers unlimited access to their media for a mere $14.99 per month, while unlimited cable access can cost as much as $200 per month. In this case, online streaming can act as a substitute good for cable access, and via the concept of substitute goods, when the price of one substitute good is higher (cable television), the demand for the …show more content…
In 2014 Comcast was ranked among the lowest customer service ratings in the American Customer Satisfaction Index. Time Warner Cable received the lowest ranking of the year. When customers reach out to help for assistance and maintenance of their cable TV they are attacked by an aggressive system, driven away. Conversely, online streaming providers Netflix and Amazon were among the highest ranked for customer satisfaction in the same study of 2014. When customers are frustrated with their cable company, they are encouraged to choose the proven more customer friendly option: Netflix or Amazon. Cable companies are losing their subscribers to their own aggression; to their own negligence to take care of their