In a world on non stop competition, one industry that is having more and more competition as technology develops is the cable industry. Recently in an article on "Marketwatch" the author explores the competion between two goods, cable companies and online video providers such as Netflix and Hulu. The cable companies and the internet video providers are examples of being substitute goods for one another. The new technologies discovered or thought of by these internet video providers provide more for the common consumer than that of the cable company. The change in technology is a determinent of supply. Therefore the internet video providers can supply more for their customers. This is causing a scare in the cable industry as one ceo of a powerful cable company thinks that the cable companies must adapt to these technologies and drive the new suppliers out of the cable martket.
Netflix, one of these competitors, has 24 million subscribers which is greater than the number of subscribers for any cable company. Netflix doesnt appear to be going anywhere any time soon, the stocks have done up 93%. Even though Netflix and many other internet video providers are on the rise there are some things in society that are restraining their growth. The government has all types of copyright and antitrust laws that these providers must obey and work around.
Cable companies have reason to be scared as they slowly are getting pushed out of their own market by these new providers. One ceo of Time Warner cable told the author that he thinks the Governemnt intervening is the oinly way that this problem can be fixed.
http://www.marketwatch.com/story/studios-disarming-cable-in-battle-with-netflix-2011-06-20?pagenumber=1
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