Demand for Cable TV in Constant Decrease

Cutting the Cord – The Economist

Since 2013, traditional (200 channel bundles) cable subscriptions, along with “television viewership,” are decreasing progressively. In fact, people are switching to online streaming services such as Netflix and Hulu.

This showcases some important economical concepts. Namely, the demand for cable TV is decreasing because the price of its substitutes (Video streaming services, skinny bundles… ) is much cheaper and more available in recent years than it has ever been.

Further, this shift from cable TV to streaming services showcases the effects of a downward pressure on the price of television. Indeed, the large bundles of channels creates a surplus in the quantity of channels supplied (viewers watch on average 17 channels while the bundle offers 200 channels), therefore, viewers switch to on-demand services and skinny bundles for cheaper prices and less “wasted” content.

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