The cable television industry is very lucrative and competitive, boasting of annual industry revenues fast approaching $100 billion. Have it in mind that this remains one of the primary reasons why many SMB entrepreneurs have dreams about becoming the next big thing in the cable TV universe.
Initially, cable was primarily designed to make available TV service to areas that cannot be reached by over-the-air broadcasting. However, with the deregulation of the industry, the floodgates swung open and the cable ballooned into a 21st-century industry where customers or viewers can now access a vast range of channels.
Steps on How to Start a Cable TV Business
Table of Content
Conduct Market Research
Truth be told, starting and managing a new cable TV company is not an easy task. Note that carrying out detailed market research makes it possible to create a profitable cable TV business in an under served market. Extensively read industry publications and local industry magazines to check population growth, subscriber rates, and spending on TV entertainment. All this information will help you understand how best to position your company to achieve success in an already competitive industry.
a. Who Is Your Target Audience?
The first target audience of any cable TV company is the end “customers” or viewers. These are the people cable TV companies are looking to entice and they will surely vary depending on the cable TV company’s project or channels.
Note that cable TV companies tend to negotiate agreements with television networks concerning what channels will be carried and on what programming tiers will be available, and this will in many ways influence their target audience.
Aside from the viewers or end customers, cable TV companies also have a second critical audience: their financial backers. This might be venture capitalists, government grantmakers, or commercial clients, but it’s likelier (at the beginning, anyway) to be an informal group, including friends, family, and others with discretionary income to invest in the business. Having a clear understanding of this audience will help the company in securing funding.
b. Is Cable TV Business a Profitable Business?
Yes, the cable TV business is very profitable because it has a higher ARPU (average revenue per unit/user) and the ability to offer more services beyond television (Internet and telephone) and this tends to increase the average amount that a subscriber might pay even if not all customers do take a bundle.
c. Are There Existing Niches in the Industry?
The cable TV industry is a very massive industry and new entrants can benefit from focusing their marketing and customer acquisition plans on a specific market. Niches to consider include;
- Subscription or fee-based broadcasting
- Production of programming for supply to third-party broadcasters
- Programming of news, sports, and educational programs
d. Who are the Major Competitors?
- Charter Communications
- Dish Network
- Cox Communications
- Altice USA
- Frontier Communications
- Cable One
e. Are There County or State Regulations or Zoning Laws for Cable TV Business?
While the FCC is tasked with regulating television broadcast entities and activities, you are still expected to obtain state permits and adhere to zoning and construction requirements for the state and city governments. Also note that building your cable delivery infrastructure may require building towers or digging underground to install cabling wires, and all these will be regulated at local levels. Owing to that, it is very necessary to find out as much as you can about your county and state regulations.
f. Is There a Franchise for Cable TV Business?
No, there are no pronounced franchise opportunities in this industry.
g. What Do You Need to Start a Cable TV Business?
- Company Start-Up Guide
- Business plan
- Business license
- Cable delivery infrastructure
- Adequate funding
- Strategy for delivering cable to subscribers.
- Federal Communications Company (FCC) license
- Deals with cable television stations and local broadcast affiliates
- Serviced office
Memorable Cable TV Business Names
- Concise Cable Network
- Entertainment Prime
- Fountain TV Company
- Crash Line
- Venus Cable Centre
- Global Prime
- Everyday Action
- Kids Only Network
- Pure Talent
- Concierge Cable Connect
- Light and Screens
- Direct Link TV
- Leo Cable Company
- Fashion Networks
- Atlantic Cable Company
- Coastwise Cables
- Flash Broadband
- Underground Television Network
- Next Generation LLC
Register your Business
a. What Type of Business Structure is Best for Cable TV Business?
When looking to start a cable TV company, you have to formally organize it as a limited liability company, an S-Corp, a C-Corp, or a sole proprietorship. While a sole proprietorship is the easiest legal entity to establish, the disadvantage is that as the owner you are legally liable for any lawsuits made against the company.
However, note that a Limited Liability Company (or LLC) remains a better option for most cable TV companies because it offers massive deal flexibility in terms of legal liability and business taxes.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Cable TV Business?
- General Business License
- Business Insurance
- Health and Safety Permit
- Operational State Facility Inspections
- Federal Communications Company (FCC) license
d. What Type of Certification is Needed to Open a Cable TV Business?
Note that you do not require professional certification to start a Cable TV Company, however, there are certain certifications you need to look out for in workers and engineers you will employ for your cable TV company. These certifications include;
- SCTE certification
- BICSI Cabling Installation Certifications
- Certified Network Cable Installer (CNCI®)
- Cable Television Engineer Certification
- Certification Cable Television Operator (CCTO)
e. What Documents are Needed to Open a Cable TV Business
- Certificate of Incorporation
- Cable Carriage Agreements
- Operating Agreement for LLCs
- Business Plan
- Cable Operators License
- Insurance policy
- Zoning Permits
- Contract Documents
- Employment Agreement
- Business License
- Employer Identification Number (EIN)
- Federal Tax Identification Number (TIN)
f. Do You Need a Trademark, Copyright, or Patent?
Yes, but in this line of business, you will acquire copyright in any original creative work the moment you produce it in a tangible form. Have it in mind that the copyright gives you the exclusive rights to, among other things, copy, sell, and distribute your work, or to license other people to do those things for you.
In the US, nothing needs to be done to receive copyright for creative work, though you may register your work with the copyright office to ensure you obtain additional protections such as statutory damages awards.
Do your Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Cable TV Business?
This will vary from at least $360,000 to millions of dollars, depending on your business size, services, and contracts you intend to execute. As a new cable TV company, you’ll need to make huge investments in cable delivery infrastructure and other satellite systems.
b. What are the Costs Involved?
- Cost of renting or leasing a workspace: $10,000
- Cost of setting up a business: LLC & Corporations: $500
- Cost Of Insurance and licensing: $6,000
- Cost of permits and License Fees: $2,700
- Lawyer Fees: $1,500
- Cost of Marketing Materials: $10,000
- Employees and crew: $20,000
- Cost of Cable delivery infrastructure and satellite systems like DirecTV, FiOS: $150,000
- Miscellaneous: $2,500
c. What Factors Determine the Cost of Opening a Cable TV Business?
- Area of Specialization
- The Choice of Location
- The Required Licenses and Permits
- The Size of Facility
- Grade of Technology and Deliver Infrastructure
- The Cost of Hiring and Paying a Business Consultant and Attorney
- The Cost for Furnishing and Equipping the Cable TV Company Facility
- The Cost for Insurance Policy Covers
- Cost of Recruiting and Training Your Staff and Engineers
d. Do You Need to Build a Facility?
Yes, to start and run a cable TV company you will need office space to handle production, business dealings, and also store equipment. Have it in mind that the cost per square foot of your supposed facility will vary massively from one project to another, especially when you compare the costs of commercial projects in different areas of the country, as well as the types of commercial buildings.
Nevertheless, expect to invest around $238–$286 per square foot to build a single-story commercial office building, $569 on the high end and $474 on the low end to build a mid-rise building, and around $545–$654 per square foot for a high rise building.
e. What are the Ongoing Expenses of Running a Cable TV Business?
- Facility lease or rent
- Employees salaries
- The franchise fee to local government
- Utility bills
- Operator and Multichannel Video Programming Distributor (MVPD) fees
- Advertising fees
- Other expenditures will be on a per-project or per-assignment basis.
f. What is the Average Salary of your Staff?
- Chief Executive Officer: $76,400
- Creative Director: $61,790
- Human Resources and Admin Manager: $54,560
- Sales and Marketing Executive: $52,411
- Accountant: $48,000
- Receptionist: $32,480
g. How Do You Get Funding to Start a Cable TV Business
To grow, a cable TV company will surely need money. Unless you’re independently wealthy, you will likely seek funding, and here are some options to consider.
- Send your business plan out to a studio, or a larger established production company.
- Procure an angel investor (who doesn’t have to be in entertainment).
- Apply for a government artistic grant.
- Partner with another production company
- Bank loans
- Crowdfund through online websites like Kickstarter or Seed & Spark.
Write a Business Plan
a. Executive Summary
Crash Line is a well-established company that will specialize in offering technical solutions to multiple-system operators (MSOs) in the cable and satellite television industry. Our services at Crash Lines to Cable TV Companies will include product repairs, upgrades, tests, and other necessary services.
This company is founded by Konan Pitt and Fred Winston, who each boast of over 15 years of experience in engineering and project development in the cable TV industry. Products designed and manufactured by Crash Lines are changing the industry by allowing MSOs to easily extend the reach of current network infrastructures and reduce overall system operating costs.
b. Products and Service
- Product repairs
- Systems and infrastructural upgrades
- Systems and service testing
- Other necessary infrastructural repair services
c. Mission Statement
At Crash Line, our mission is to provide services and products that match the quality and expectations of cable TV companies in this modern age. We will always strive to make the professional experience accessible to our cable TV company clients every year.
Our vision at Crash Line is to generate the revenue needed to offer us flexibility in accepting other projects associated with cable TV companies.
a. Goals and Objectives
- Open two more locations in the Boston area by the beginning of year two, and ensure that each location follows a business system primed to operate at maximum efficiency while maintaining the highest standards of quality, as per a franchise.
- B2B sales increased to 65% by the third year.
- Maintain a profit, reinvest into the business, and further expansion
b. Organizational Structure
- Chief Executive Officer
- Operations Manager
- Human Resources and Admin Manager
- Sales and Marketing Executive
a. SWOT Analysis
- Superior product and services
- First mover advantage
- Ability to manage regulations and business environment
- High Margins
- Ability to consolidate and expand the market position.
- The business model can be easily replicated
- Lack of critical talent
- Low return on investment
- Developments in artificial intelligence
- Changing technology landscape
- Reducing the cost of market entry
- Opportunities in adjacent markets
- Increasing standardization
- Government regulations and bureaucracy
- Threats of new entrants
- Culture of sticky prices in the industry
- Growing protectionism
b. How Do Cable TV Businesses Make Money?
Cable companies make money mainly through advertisements and cable fee subscriptions. Advertising-supported cable channels derive revenue from two sources: advertising and license fees. Advertising rates are based on several factors, but a significant factor is the total number of potential viewers.
c. Payment Options
- Payment via bank transfer
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Create better contract proposals
- Use strong customer value propositions (CVPs) to set yourself apart from the competition.
- Create a blog to offer cable TV tips, news, and company information, sharing news about awards and other company achievements.
- Ensure that your website is up to date and easy to navigate.
- Ask customers to provide testimonials that we can use on our corporate website and in advertising.
- Using a proven partner with the experience to assist in the execution of your segmented cable TV company marketing strategy
- Give word of mouth marketing a try
a. How Much Should You Charge for your Service?
Most often, starter plans cost around $60 per month but will vary depending on your cable company and the type of package you intend to offer customers. Nonetheless, here are estimated price ranges for cable TV plans;
- Starter cable plan: $44.99–$74.99/mo.
- Mid-level cable plan: $69.99–$84.99/mo.
- Premium cable plan: $79.99–$134.99/mo.
b. How Much Profit Do Cable TV Business Owners Make a Year?
Have it in mind that the amount of profit a cable TV company owner can make a year is highly variable depending on your area of specialty, location, reputation, and other factors. To make space for your company in this industry, it is recommended you start small and find reliable local clients who value the quality of your services and channels.
By slowly building up your portfolio and finding your unique niche in the market, your company could genuinely bring in $50,000-$1, 000,000 in annual profits.
c. What Factors Determine the Amount of Profit to Be Made?
- The size of the cable TV company
- Business location
- Business management style
- Approach to business and contracts
- Deals with cable television stations and local broadcast affiliates
- Cable Operations and Licensing System (COALS) account
d. What is the Profit Margin of a Cable TV Business?
According to industry reports, cable TV companies in the last few years have generated high-profit margins of around 31 – 38 percent.
e. What is the Sales Forecast?
Have it in mind that after the initial investment and launch, a lean first year, and the establishment of a good facility and adequate cable delivery infrastructure in the second year, the business is expected to expand through its own financing after three years.
- First Fiscal Year (FY1): $520,000
- Second Fiscal Year (FY2): $1,480,000
- Third Fiscal Year (FY3): $4,620,000
Set Up your Office
a. How Do You Choose a Perfect Location for Cable TV Business
- Necessary cable delivery infrastructure
- Government and regulatory controls
- The purchasing power of the location
- Accessibility of the location
- Traffic, parking and security et al
b. What State and City are Best to Open a Cable TV Business?
- New York City, New York
- Los Angeles, California
- Atlanta, Georgia
- Albuquerque, New Mexico
- Dallas, Texas,
- Columbus, Ohio
- Colorado Springs, Colorado
c. What Equipment is Needed to Operate?
- Sound Gear
- Stabilization Tools
- DSLR Camera
- Cable Delivery Infrastructure
First, you have to realize that ideas come from teams; therefore you’ll need to search for exemplary employees to help make your ideas a reality. Some of the people you will need to hire include; business network executive, head of development, relationship manager, human resources, head of production, accountant, and customer relationship executive amongst others.
Launch the Business Proper
There are a good number of common challenges every cable TV company owner will need to address before launching the business. They include;
- Regulatory Concerns
a. What Makes a Cable TV Business Successful?
- Building alliances and co-promotions programs
- Implementation of business system
- Production quality
- Highly creative programs
b. What Happens During a Typical Day at a Cable TV Business?
In this line of business, a typical day might include many of the following responsibilities:
- Seeking new business clients if your area of business is commercial work
- Penning down your own scripts or reviewing the submissions of other screenwriters
- Attending fundraising meetings or events to present your project and secure financing
- Attending networking events or scheduling meetings to find editors, cinematographers, actors, co-producers, or other talents who might add creative value to your company
- Paying salaries and bills, invoicing clients, and attending to other business and office matters.
c. What Skills and Experience Do You Need to Build a Cable TV Business?
In this line of business, your portfolio is very important for getting new clients, and also for finding investors, partners and collaborators. If you’ve worked for others in the business, you must exhibit the best of your work. If not, create your own content for demo purposes. It is also necessary to have the self-confidence to be able to sell yourself and your vision.