The price of everything in the telecom world has fallen over the past decade, except for cable. Cable is now 77% more expensive than it was ten years ago, an increase that dwarfs the rate of inflation and makes telecom executives salivate. The Times looks with pity on all of us who splay our wallets wide for the industry, and asks if there’s any salvation other than à la carte pricing.
The starting point for comparison is 1996, when Congress deregulated the telecom industry, ostensibly to spur competition. Startups and cable companies quickly trammelled the telecoms’ ability to dictate prices, but nobody emerged to take on cable.
Kevin J. Martin, chairman of the F.C.C., said in an interview that since 1996, when Congress increased competition in telecommunications, prices have dropped for many other services.
“We’ve seen the opposite occur in the cable industry,” he said. “The dramatic increases in pricing we’ve seen are one of the most troubling issues from a consumer point of view.”
In 2007, average monthly revenue for each Cablevision subscriber was $75, up from $65 in 2005, according to SNL Kagan, a research company. At Time Warner it was $64, up from $54.50.
The industry isn’t changing its prices or practices because consumers aren’t changing their habits.
“I work eight hours a day facing a computer. When I come home, the last thing I want to do is mess with another computer,” said Eric Yu, 24, a college student in San Francisco who pays around $80 a month for cable.
Mr. Yu said he watches only a handful of channels, including some in high definition like National Geographic. But to get them, he has to pay for a premium package. “I just pay the bill and try to forget about it,” he said. “It lessens the pain.”
Well, some are…
Evelyn Tan, 22, a friend of Mr. Yu, takes a different approach. She pays Comcast $33 a month for Internet access and does not get cable television — but she does watch TV programming.
In fact, she watches ABC shows like “Desperate Housewives” and “Gray’s Anatomy,” which are free on the Web. When she wants to watch shows or movies that are not readily available online, she says she easily pirates them. “I would not pay for cable TV at all,” she said.
A la carte programming isn’t coming anytime soon, but the monopolistic anti-consumer juggernaut Verizon might provide some relief as it elbows its way into the television business. While Verizon is no better than its cable competitors, its arrival opens a brief window for competition by allowing consumers play one giant against the other to eek out slight savings on cable programming.
Of course, those slight savings might only bring your rates closer to what you were paying two or three years ago. Neither the Times nor the FCC think cable is worth the cost. What do you think?
Cable Prices Keep Rising; Customers Keep Paying [NYT]
(Photo: Getty)
I really wish people would understand that Ala carte isnt the way to go. If youre currently paying $100 per month and have 100 channels, then you are paying $1 per channel. If you were to say you only wanted 14 of those channels, I can GUARANTEE that your bill wouldnt be $14 per month. If Ala carte was to roll around we would end up paying pretty much what we do now for many less channels. I know people complain about the shopping channels and garbage like that but those are usually provided to cable companies for free and in some cases they PAY the cable company to broadcast it, so by dropping those you wouldnt save anything at all.
@bohemian:
I can see your point but they are after all for profit companies. My point was the fact rates increased 77% percent more than inflation is not just cable cos jacking up the prices to increase profit margins.
@Amy Alkon:
Yes but in some of those European countries they also have to pay a pretty stiff fee for a TV license, so they are paying for it in some way
Hi, first time posting on this website, I work for a cable company and I will let you in on why cable costs more.
1. Physical Plant – Cable companies have to put in and maintain a huge amount of cabling, both fiber optic and copper based cabling.
2. You can’t get Video on demand, or Free on demand content with Satellite.
3. We maintain a huge staff for maintenance and service issues. I work in the dispatch for the cable company so I know about this. We have to send technicians out for the stupidest things like customers who don’t understand that it is necessary to change the batteries in the remote. This drives our costs up as well.
Look, we live in the areas that we do business in, Satellite providers don’t. If you need a service call from the satellite company good luck.
4. Package pricing, we have to negotiate with every provider, animal planet, SciFI etc. So we do have to spread the cost of programming, but hey so does satellite.
5. TAXES. Cable companies have to pay local and often state franchise taxes. Satellite providers don’t. Some companies get charged more than $50 for each piece of property that their lines go by, whether or not there is a cable customer at the location we pass by. We get taxed for the possibility of income as well as the income we make.
People, have you read your posts? You are complaining about a purely optional entertainment service. I read post after post about people resigning themselves to the fact that everything sucks and they wished there was something they could do about it.
Does anyone remember the phrase from the movie Network? “I’m mad as hell and I not going to take it anymore.”
This is America. Vote with your dollars and stop using your cable service. When you cancel, tell them their service sucks, their selection sucks, and their pricing sucks. If enough sheep would get backbone and refuse to buy the garbage, things would change.
Over $150 a month? I pay about $80 for DirecTV, and that’s with two TVs, a DVR, and HD.
I’d LOVE to see a Consumerist poll:
@snoop-blog: Exactly what we do. $30 for Road Runner (called them and got a 12 month deal at that price), $13 for NetFlix, and I built a coat hanger HDTV antenna to get about 20 channels OTA for free. Sure beats paying TWC any money for cable TV too…
@CPC24:
You can easily reach $200 if you do PPV, VOD purchases, have triple play with no bundle discounts etc.
DirecTV only provides TV service.
perhaps it is more expensive, but how i do love my cable. i would rather go without than have satellite.
@Trai_Dep: actually yes. sorry but i actually like comcast. not only is digital cable convenient but its is much better than cable was for me about ten years ago. my picture is better and i almost never have outages. that being said, i should also mention that ten years ago i was living in a small town called, Concrete WA, and the cable was so small and basic we didn’t even have Mtv (a tragedy for a teenager from a big city).
here’s what i really really hate about satellite, the damn thing takes forever to switch channels. and it goes out a lot. i’d rather have reliable television or no television then spend for satellite.
Part of my rent is to pay the cable bill for the house. $130 a month for 4 televisions and internet.
Once I move I plan on dropping cable and just having my brother record the stuff I want to see.
Plus most of the stuff I watch is on DVD anyway I can always buy them or get a Netflix account.
And the fact that cable companies are pouring billions of dollars into FiOS and other next-gen technologies to push HDTV signals doesn’t have anything to do with fare increases, right? Must be just another example of the evil, demonic corporations fleecing Podunk Joe.
There isn’t a free market in premium television (read: anything other than broadcast), so there isn’t any reason to expect cable companies should be subject to market forces.
*From the article* A la carte programming isn’t coming anytime soon, but the monopolistic anti-consumer juggernaut Verizon might provide some relief as it elbows its way into the television business. *endquote*
No shit. Oddly enough, it’s NOT the cable companies at work here on that (at this time.) If you want to stick pins in the lack of a la carte programming, blame the production companies. If a cable provider wants to carry ESPN, then they are forced to purchase a programming bundle including Disney Channel, A&E, and Lifetime (thanks Disney inc, parent to ABC!). Want CNN? Well, bundled with CNN is Headline News, TNT and TBS (thanks Time-Warner Inc!) Want your daily dose of Spongebob on Nick? Got to buy VH1 and MTV (thanks Viacom!) The problem is that many channels are focused on such niche markets that they are not commercially viable and to get any airtime on any cable or dish provider. Take my favorite channel, G4. A lot of y’all probably watch it, but not as many folks as to make ad revenue meet production cost. So Viacom bundles it with Nickelodeon, making a la cart programming impossible. I enjoy ESPN, but damnit, I don’t want to pay for A&E and the I Hate Men channel (er, I mean Lifetime.) But, on the flip side, folks who like Lifetime and LMN might not want to pay for ESPN either. Once the programmers separate these bundled channels, then a la carte programming is commercially viable (only question is, would the cable companies offer it?)
Free your mind. Drop the addiction.
I recently moved, and my new roommates don’t have cable. While I will probably miss it during the summer, as I really don’t want to spend my summer watching American Gladiator and whatever mindnumbing reality TV show is on, during the regular TV season, I haven’t missed it that much. I watch what I can off the antenna, and what I can watch for free online when I get the chance. I figure I can wait till the cable shows are released on DVD then netflix them
Ok…..here is an idea. I often beta test equipment for various companies and I am currently testing hardware for a company called FyreTV. The gist of the hardware is this, it streams porn from the internet to your TV, the selection of movies is pheonominal and the menu system is top notch. You must have a high speed connection close to your TV. No problem there. I have ATT U-verse, the U-verse box has an network jack on the back, since all the cable boxes are part of my U-verse network.
Anyway, basically all the box does is more than likely uncompress the streamed video. There are several video quality settings depending on your connection speed. Mine is currently on DVD quality, which is damn good.
This can easily be used by the tv stations themselves to completely bypass the cable or satellite operators. The technology is so good that you can fast forward and rewind at a moments notice. There seems to be no lag on the stream. Just saying….there are other opportunities open for this besides just porn. Of course porn has always been on the forefront for new technology when it comes to the internet. Hell, if it weren’t for porn, the internet would be less than it is now. I have been renting it out to my friends to test and use lately for $10 a week, even though I am not paying anything during the beta testing.
http://www.fyretv.com shameless plug
Paying good money to watch the same show over and over don’t make sence,for local tv just need a ant. most of time i can watch shows I like on Adobe meda player and VeohTV player, all free
I sm sick and tired of people trumpeting downloadable shows or stuff on web sites.
THEY ARE NOT CLOSED CAPTIONED AND THEREFORE DO NOT EXIST TO MANY OF US.
So our only options are STILL cable or satellite.
@JoJo3737: And you’re sitting here complaining that people are daring to complain about high prices and shitty service on a service they want to have. Whether or not you want to have that service is up to you. Some of us just want geeky documentary channels in hi-def without being bent over, and we don’t want to hear about other peoples’ high-horse attitudes of how we should free our minds and other shit like that. I *LIKE* documentary TV. I just don’t like the stiff prices for all the shit I never use.
And I have every right and reason to be unhappy with that. Gee, this is a consumer-advocacy web site. Where else should we talk about that sort of thing if not on this type of site?
@The Stork: “When she wants to watch shows or movies that are not readily available online, she says she easily pirates them. “
L2R.
Ok for all those people who “don’t” own TV’s.
If spend 4 hours a day watching TV shows on TV(Cable, Sat.,Ant., DirectTV wtf ever), then it’s wasting my time/life.
But watching 4 hours of TV shows on the internet is some how enlightening and should be praised?
So it’s the medium ……ok.
Two months ago I subscribed to cable for the first time since 1997. In 1997 I was paying $19 a month for basic cable, now the same thing is $75. In 1997 I was paying around $65 for my cell phone account, now I pay about $72. Moral? Most cable services are monopolies in their areas and must be regulated.
On a related note, I thought MTV couldn’t get any worse than it was a decade ago. I was wrong.
@postnocomments: It’s a weird racket even in places where there is competition (very rare, I know). I’m moving to Austin and thought about leaving DirecTV. Basic cable was 70$; my DirecTV package is high def DVR + 30 HD channels for 75$. To get a similar package with *both* available cable companies was 100$…with crappy high def. I’m surprised they’re still in business. But then again, I think enough people are numbed to the prices and just shrug it off.
A la carte won’t help… only competition will help lower prices.
@GhostMul:
I have not had to call for service on my satalite TV. Cable was always screwing up. Satalite is a better deal. Sorry.
@zingbot:
Regulation is NOT the answer to pricing. Regulation is the problem.
Here we are only allowed ONE cable provider per address. No competition.
Time Warner has a deal with the city, so Time Warner is what we get, and why
my combined TV and internet bill went up to $140 before I dropped it. Very
frustrating.
If they would break up the monopoly, I would go with anyone who could
provide basic channels plus the 5 or so channels we actually watch.
I recently dropped my cable tv subscription and I have to say I’m much happier for having done so.
I was paying $60 a month and really only watching a small handful of channels. All of the shows I watched I can now download, and in some cases, for free online.
The internet will beat the heck out of traditional cable tv. It is just a matter of time.
You can all thank that useless moron John McCain for that. While he sits at the head of the Telecom committee, he bend over and says to the Cable Companies, “Just don’t stick it in too far, please.” As usual, he has done NOTHING. Bet you can guess who a big contributor to his campaign is! And idiots will STILL vote for the zero
A new pricing idea! Company can offer…
Basic Broadcast for Price A(required)
Add on:
10 non-premium channels of your choice
20 non-premium channels of your choice
premium channel packages
People will go up to the higher amounts of channels as the tv addicts decide they need this channel and that channel anyway so the company will still profit.
Doesn’t help that comcast upped their rates here. Does help that verizon offers DSL finally. This summer? We’re switching. Comcast can bite me. $70 a month for BROADCAST cable and internet? It’s outrageous.
(Yes, I get only the stations I could get with an antenna. They don’t even promote the package. When I asked for it I had to describe it and point it out on the website or I’d be paying over $100 per month for basic. The phone person even tried to talk me out of it..oh that’s just like ABC and such you don’t want that you get much more choice with..)
@freejazz38: Yep, all of this is exclusively the fault of a single senator. Good call. Jackass.
I quit watching TV once I started spending 3-4 hours a night on YouTube.
I dropped my Cable service 2 years ago – and I couldn’t be happier.
Netflix is my new best friend, and far far cheaper than cable.
We had Comcast for cable/internet and it was $100/mo. This was for Analog service with extended basic service. They kept slowly disconnecting channels and not adding new ones to replace them. I called to find out about their digital service and it was $30/mo more.
So I’ve dumped Tivo/comcast and now have Dish/ATT and pay about $25/mo less than I was before.
My usenet account costs $12 a month and every show I want to watch is subscribed to via RSS and downloaded with SabNZBD+. It sits on my computer until I am ready to watch it, commercial free, using my media client connected to the projector in my front room.
I think comcast charges $60 a month here and that doesn’t include on demand.
A few months ago I switched from Comcast for cable and internet to ATT U-Verse. The old bill was $170, new bill is $124 and I get two more receivers and more channels.
Yes please, a la carte! They can charge a basic “turning-on” fee ($20 or something) and then charge by channel — how hard is that??
I’d make out like a bandit — we watch about 3 channels. But with my mom in the house, I can’t switch it all to Internet. Grr!