In addition, high unemployment in the United States means fewer new households, as children delay moving out of their parents’ houses, or people move in with roommates. That can reduce the number of households that pay for TV.
Cable companies would like to get low-income customers back with cheaper cable packages, but their hands are tied. Content providers such as the Walt Disney Co. and News Corp. won’t license their channels one by one, so subscribers have to take big, expensive channel packages, or very basic ones, which offer little beyond what’s available with an antenna.
Content providers now get billions of dollars in fees from cable service providers, and they want to make sure that whatever new industry model comes along, they’ll get paid. It’s not obvious yet that internet video will let them sustain their profit levels.
Six companies create the content that consumes 85 per cent of U.S. viewing hours, Moffett said. “Until they get on board, the train’s not leaving the station.”
- Internet TV challenges cable for viewers, Associated Press, November 5, 2010.
2. Should you be able to back out of a deal if the going gets tough?
The Toronto Star printed an interesting story recently about an angry condo buyer who wants out of her deal. Easily swayed by advertisements and affordable prices, Alice Batista, single mother of three, put an initial $50,000 down on a planned condo in downtown Toronto. The development, the chic, 5-star Trump International Hotel & Tower, was slated to be open on January 30, 2017. Currently, due to previously unforeseen delays, it’s two years behind schedule.
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