The higher tiers move the customer into 105/10 megabit per second speeds, 260 plus channels with any-room DVR, and phone (Pricing, 2015). These prices have mostly stayed the same over the last several years. Special offers sometime lower prices below these points but these prices reflect the average over the last 3 years. Theprice elasticity of demand for Comcast products is inelastic in nature. This is due in part to the cost to Comcast, programming expenses are affected by the programming license fees charged by cable networks, the fees paid for retransmission of the signals from local broadcast television stations, the number of video customers served and the amount of content provided. Network installation, 20142013201217181920212223Comcast Subscribers Television Vs. InternetTelevisionInternetYearMillion subscribers
maintenance, and upgrades, account for more cost to the company. This is inclusive of the cables from pole to customer premise and pole to pole, amplifiers, Nodes, and headend equipment. Set-top boxes and other customer premise equipment (CPE), such as modems are another cost to Comcast. This is cost that most would believe is off set by rental fees but the average life of CPE is about 2 years and thefees collected only account for a fraction of the cost of these devices.Dependent on were the customer lives they may have services available from other providers such as Verizons FiOS. These providers cost are comparable to Comcast in many areas were services overlap. One of the major competitors to Comcast video is Internet based video such as Netflix, Amazon Prime, and Hulu. These services cost less than basic cable TV service and don't require the rented equipment. They do require you to have a Computer or a separate device that connects to your TV these range in price from the $35 Chromcast up to $99 for the Amazon Fire TV. They don't offer live content including sporting events which is a major issue for many people. The customer also needs to have a separate Internet service to access the content from the provider. Dependent on the Internet speed the customer wanted this would cost from $45 up to $89 a month. When you start with the average Internet service most people buy, 105/10 at $54 dollars (Pricing, 2015) added to $8 to $10 month for the streaming service, along with the cost of 1 streaming devices at $99 over 12 months, your monthly cost is $72.25. When compared to $89.99 a month for 220 channels, one Set Top Box, 105/10 Internet, On Demand, and many other built in services (Pricing, 2015), the savings don't really exist for the customer in the end. When it comes to high speed Internet and Phone Comcast does have competition from some other providers such as Verizon FiOS the same as with Video. Outside of these few instances the only other competition comes from the local copper phone providers. These providers provide phone service with the same capabilities and prices are on par with Comcast. Internet from copper phone
providers is limited to DSL service with speeds generally below 10/5 megabits per second but the cost is around the same as Comcast 25/5 at $45 (Pricing, 2015).
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- Spring '14
- Microeconomics, Internet service provider, Cable television, Broadband Internet access, Comcast Corporation, American Cable Systems