Cable: The Worst Deal Of The Decade
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)
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Comments:
Our cable package went from $115 to $169 in three months. Our discount ran out and Knology bought our cable company and jacked rates. We ditched a bunch of services but in order to watch any of the channels we actually want to watch we have to keep digital, even though most of the channels are basic cable on most other providers. We have limited options. 2 cable companies that both have decided to run up rates rather than compete. Or dish/direct TV.
We are actually considering getting old style satellite dishes. Between a KU band dish, a 4DTV dish and an HD attic antenna we could get what we want to watch. The equipment outlay would be about $1000 and about $30-$50 a month for 4DTV subscriptions, plus another $35 for broadband internet. This isn't an option for people who live in apartments or somewhere with HOA rules.
The cost of maintaining lines is why cable costs more. Lose the wires and your labor needs drop immensely, but until then it will continue to rise.
@bohemian:
Regardless of HOA or Apartment rules they cant stop you from puting up a dish... they can set rules on how you attach it , but not stop you...I forget the exact law but its something federal...
Eek out, hee!
I pay way too much for cable/internet/phone/HDTV/DVR but we love to watch TV. I know it's supposed to be one of the first things you give up if you're trying to save money/pay off debt (which we are), but cable & internet would probably be one of the LAST things we'd give up because we use it so much.
I don't have cable tv, i don't have a landline, I don't have a DVR. All I have is my mobile phone and Hi-Speed cable internet. I use BitTorrent to download the new episodes of the 4 shows I watch. There's no way I'd EVER pay ANY amount of money for TV or DVR service.
One of the downfalls of not having broadcast is the inability to stumble across something new. I suppose you could haunt the various channels websites or get word of mouth.
What I really want to see is various broadcasters offering their content on a subscription basis in a full screen stream or download. If we could get the 10 channels we watch via our broadband line we would ditch cable. I think that is part of the big fight over net neutrality and messing with people's bit torrent downloading.
The whole tier pricing is BS. When you go to the grocery store and need 10 items, the store can't charge you for everything else they sell. Cable reasons they do this to keep costs low. I have to pay for a bunch of channel I would never watch and there's other channels I want that are in a higher tier (read more $). So I have plenty of shopping channels and 2 of each network but I can't watch G4, which i really want?!?!?
Obama, can you do something about this?
We are with comcast in Atlanta and our cable and internet bill is about $120 a month. So last week, I called Comcast to "verfiry" we didnt' have a contract because I was thinking of switching to ATT .. Now I know Comcast doesn't do contracts, I was just trying to get a point across. Immediately, the rep said since we were thinking of leaving she'd give us a break and she lowered our total bill to $72 a month, taxes included. We'll get that rate for a year.
I work rotating shift, ergo 25% of my tv-viewing time falls between midnight and 6 a.m., which mean's i'm PAYING TO WATCH INFOMERCIALS!!
The non-infomercial programming repeats every 6 hours or so, then gets rerun several times over the next few weeks, then again in about two or three months. Personally, i find enough of the "offerings" on cable to be so ... mindless? vapid? insulting to my limited intelligence?
In any case, when i had cable, and actually watched it, i found myself getting pissed off each time i remembered how much crap i was paying for.
And it is a huge time-suck. Wow -- i just spent three hours watching a schlockumentary about the design and manufacture of zipper plating machines during the spanish civil war... (We won't talk about usenet and the web, ok?)
Which is why i don't have cable, although I have been thinking of resurrecting my roof antenna for those new-fangled digital TV signals that all the kids are talking about.
We pay cable and resent the bill every month.
We've also been watching our friends who have dropped cable for the internet thing come to our house to watch TV more because it is even slightly harder to get what you want, and you lose the accidental discovery aspect. They tout it as the "great freeing" from cable, but in reality they are leaning on our cable service - all with our permission because we love the company.
Regulation is the answer to the pricing.
After our cable bill in Boston (Comcast) hit $150/month, my wife and I decided to eliminate the TV portion. We now just use Comcast for phone and internet ($70/month). The $80/month savings (nearly $1000/year) is spent on far more valuable things.
Naturally, once we eliminated cable, there was truly nothing to see on TV, so we got rid of the television set altogether. The 2 hours/day saved (over 700 hours per year) also go to more valuable things.
If there's something we _really_ want to watch, we can easily find it in downloadable form somewhere on the Internet.
When long-distance telephone was deregulated in the 1980s, it was legislated that competitors to Ma Bell could use Ma Bell phone lines to offer competing services (competitors had to pay an access fee of course).
The same thing needs to happen to the lines operated by Comcast, Time Warner, and the rest of the cable operators. That's when we'll see rates drop through the floor. Write your congressman!
@betatron: Preach it, brother! I cancelled my cable almost 8 years ago for that very reason, and have hardly missed it. When there's something I want to see on ESPN, I can go to a sports bar or restaurant which is more fun that watching at home. When I'm at a hotel flipping through their cable channels, I'm amazed at how bad the programming is, and how much of cable is infomercials.
I get by now with indoor rabbit ears, but now I have my eye on this really big outdoor antenna at Radio Shack;) It would cost the same as about two months of cable. Consumerist likes to poke fun at Radio Shack occasionally, but RS does have its niche, and the cable companies are going to drive us all back there. Long before cell phones, cable companies pioneered the concept of bad customer service, although cell phone companies have since showed the cable companies how to take that concept to the next level.
I have never, and will never pay for cable. We have DSL which enables me to watch what I want-when I want-commercial free!
I live in the mountains - one provider for cable, Windstream (ex-Alltel). If I want cable TV, I have to pay separately for a stupid hard-wired telephone account.
Why don't I get a dish? You guessed it: only one ISP
in the area: Windstream, who isn't EVER going to offer
cable modem svc.
I pay a fortune simply because I need DSL.
The cable industry keeps telling people they can't provide ala-carte because the content providers won't let them. They are lying.
Certain programming seems to come in bundles. Something like HGTV is tied to Fine Living & DIY channel. But those three are not tied to a larger grouping. So you COULD technically just purchase the three. Same goes for Discovery. Discovery isn't tied to any larger entity. IE: you don't have to get ESPN channels in order to get Discovery channels. Discovery is grouped with a bunch of various discovery branded channels and TLC.
The remaining big dish programming providers can sell content in much smaller packages to consumers. If they can do it the cable companies can do it. They just have a massive scam going on and won't change unless forced to do so. To get an idea what I am talking about look at the various package levels and alacarte offerings on NPS's website. [www.callnps.com]
So no, you don't need to get 20 channels of sports, religious channels and other tripe in order to get BBC and G4. Cable companies are holding in demand channels hostage to force people to buy a bunch of crap they never watch at highly inflated prices. Someone in the govt. needs to grow a pair and step in.
@khiltd: G4 has improved quite a bit. They have been broadcasting a bunch of Japanese TV shows that we got hooked on. Attack of the Show is kinda lame but it is far better than much of what is on. How sad it that?
I no longer have a TV, but when I did, the incompetence of my cable supplier (Rogers) worked FOR me, in some great conjunction of the stars. When I moved into my late grandmother's house, I cancelled her cable service immediately, but it took them SIX YEARS to disconnect it, even though they stopped charging. I assume that the tech, on the day he was originally supposed to cut it off, went to a pub instead and just said he'd done all his tasks.
Sadly, I think this was the most satisfying experience of my life.
I haven't paid for cable in over 10 years...there is nothing on that I want to watch that badly anyways!
I get random cable channels from my "ghetto service" (plugging the TV into the existing cable from the outside), and make up for what I don't get at times with torrents and Netflix. If I have to go without or wait, so be it. I'm not saying this in a "I'm better than you - kill your tv" self-righteous way, because I can easily enjoy cable programming. I just refuse to pay for it. Why would I want to pay for more ads and infomercials?
If I was paying for ad-free or a la carte content, I might reconsider. But that just means I won't be paying for any TV in the foreseeable future.
i wish american cable was like britain's. you pay one price, a tv licence, per year and that's that. and the most basic there is like 60 channels not 12.
I've been trying to get Brighthouse to add the NFL Network and their response is that if they did it would cost everyone money and that their consumers don't all want the NFL Network. My argument is that I have about 30 channels or more that I don't watch that I pay for (ex. Home Shopping,QVC,anything spanish). Why can't I pick the channels I want and be charged for just those channels? As is everything , people have never complained or canceled service enough for these companies to change their tactics. It's always about making more money. Can't a company make a profit and be happy with it - why do they have to make MORE money? If it's a profitable company, stop raising prices , stop gouging customers, and start thinking about us as people not dollars.
meh. I download new BSG eps from Giganews once a week and watch them on the iMac. that takes care of my TV needs. cut the goddam cord already. I sold my TV in January and even though the house-sit place has three TVs the only time I watched one was when I was sick for a day or two. the owner is paying $90 a month for cable TV that nobody watches, but that's his business.
Screw verizon! They installed FIOS where I live, all over the place and then sold all their lines in the area to a company called Fairpoint who has zero plans to offer the already installed FIOS service...WTF!?
Why would you publish you full name in the newspaper alongside a statement admitting that you pirate TV shows? Evelyn Tan will probably be slapped with a lawsuit in less than a week.
Haha! I'm happy I lived without cable for most of my life. All I need is an antenna to watch network television, and broadband internet to watch the cable shows. DVD boxsets just sweeten the deal.
In socialist France, you can get cable TV, telephone service, and DSL bundled for 19 euros. Of course, with the dollar trading more like the 50-cent piece these days, that would be about $30. Still, much less than most people are paying for any one of these services in the supposed land of the free market.
"Free market" would, of course, imply that I am free to choose some other cable Internet provider besides Time-Warner. I am not because there is no other cable provider.
I am, however, most grateful to you who blog at Consumerist, for the level three tech support number -- a direct line to people who know what they're talking about (usually), and even at 3 a.m.
@Amy Alkon: We have two cable options that are in collusion to keep prices high and keep competitors out. That is hardly free market.
Cable TV needs to be regulated just like any other telecom public utility.
Direct TV seems to have much better deals.
any ways cable and sat needs to get rid of the extra box fees. Cable also has high DVR fees as well.
Of course Fios and dish are just as bad, if not worse (thanks to ETF and ultra sketchy install process woes). Not loving the cable co's but the one sided coverage from the NYT's is disappointing.
How about the disastrous broadband cable situation in the US?
The complete joke of our cell phone situation versus the world?
Guess if you buy enough ads you get a pass in the Times. And they wonder why newspapers are dying. . .
I agree the prices are too high but what most of people fail to understand is cable cos are paying content providers to get the programming. And every year those fees go up. Now even local broadcast stations (their owners) are demanding payments for otherwise free programming.
Everyone wants more money. This whole industry is getting way too big. Sport fans are willing to pay whatever the price is to get their fix. Now The Big Ten and others want bulk deals. Everyone needs to pay even though only some will watch it. And as long as people are willing to pay more they will keep jacking up the prices.
The cable companies are not really making a killing. Check their stocks if you don't believe me...
PS and as for the comment about allowing competitors to use someone else's network all I have to say it would never work. NOBODY would be doing any major maintenance and upgrades. Why would they spend millions of dollars so a competitor can piggyback on their network?
Ditched our cable when we moved almost four years ago; I mostly miss it when I'm really, really bored or too sick to read.
I'm considering not upgrading to the DTV stuff; we watch a few shows on the networks, and now that they make them available online in USEABLE formats, we frequently end up doing that ANYWAY just so we can watch when it's convenient for us.
And I really LIKE TV. I'm just not willing to pay that much for it. Particularly not when there's ads and stuff.
Sadly, us Manhattanites are, in general, completely barred from satellite. I'd love to get DirecTV, for no other reason than to get NFL Sunday Ticket, but it's physically impossible.
What people who have cable don't realize is that come next February, when analog ends and broadcasters switch to all digital transmission, all people with newer TVs need to do is hook up an antenna, and they'll get beautiful, noise-free reception without the need for a greedy cable operator to send them the same signal. Those with older TVs can get a converter box for a one-time purchase. With or without a government coupon the box would be certainly cheaper than shelling out $50+ each month.
Hopefully, the cable channel providers will realize that people are tired of paying for a middleman and make some deals with the broadcasters so that their programming gets broadcast on one of the digital subchannels. They could revenue-share the commercials. For example, NBC could carry Bravo/USA/MSNBC/CNBC. Fox could carry FX/FNC/FBN. Discovery, Scripps? Start negotiating!!
Comcast and others are trying to conceal all this by telling use they're ready for digital, "no need to do anything." Yeah, like dropping Comcast in February like a hot potato.
@2719: Please see my post about direct programming available for big satellite dish users. Sure the companies providing the programming may charge more, but if you look at the prices and flexibility available to people using a big sat dish compared to cable you can see where their money making game is. They force end users to buy huge expensive packages of channels they never watch in order to get the maybe 10 or so channels they watch. It is obvious that they COULD give people more targeted packages and individual ala carte programming. They don't want to because it is highly profitable to charge someone $100 a month for 900 channels of crap so they can get the two or three in demand channels they refuse to carry as part of their basic cable programming.
A cable industry veteran of 20+ years explained to me that the these huge increases in subscription cost have primarily been caused by increased fees demanded by the content providers, and not from infrastructure upgrades, maintenance, or any other factor usually cited. If this is true, I don't know how alternative technologies like FIOS IPTV would really solve the problem. Perhaps the mere presence of another player would force these content providers to lower their fees? A-la-carte pricing seems like the best solution, but you'd have to prepare yourself to pay a hell of a lot more for sports channels (the bulk of these licensing fee increases) than you do for others. Seems fair to me.
PS: For anyone who tires of those who proudly proclaim "I don't even have a TV", here's a nice satire of this sanctimonious twittery:
[www.theonion.com]
Congress deregulated an industry that's set up on a monopolist model. Almost every jurisdiction in the U.S. grants a single franchise agreement to one cable company.
Well, when you deregulate the only supplier of a product, what did they THINK was going to happen to the price?
@HooFoot: Watching shows that ABC streams for free on their website is hardly piracy. A better term would be "perfectly legal."
I've been steaming over the cost of TV for years. My basic bill is supposed to be $100.00 a month but with all the rental fees and surchagres, I can't afford to watch TV. It makes me feel helpless and violated. Thanks to this thread, my solution will be to upgrade my computer monitor so I can see what I want, when I want.
In 2009, when TV goes digital, don't let the cable company convince you that buying your own box won't work on their network. I was told this by Comcast. I found out otherwise.
@AtomicPlayboy: You know what? I actually like TV. If I am home, it is most likely on.
Oh, and I have DirectTV, which is light-years ahead of Comcast in the product and customer service areas. When I buy my next house, I've already told my real estate agent that I won't even look at a house that doesn't have a view of the southern sky.
I can't imagine paying for cable. If I ever get a craving to just sit down and watch something, there are tons of shows offered for free on the web by the networks- and my internet doubles as a great research and communication tool.
I watched a *lot* of TV about 8 years ago. My life is so much better without it.
@allie928..
if you have cable of any kind you wont need to buy a box when tv goes digital...only the people who have analog only tvs, that dont also get cable or sat, would need to buy one to receive over the air broadcasts
I only pay for cable when there's a promo. As soon as the promo pricing is over, I cancel service. As someone else mentioned, if you can get broadband at your residence, you can watch most of the popular shows on the internet. Almost all of the big networks stream their shows for FREE through their websites. And of course there's always Bit Torrent.
@rainmkr: No, it's clearly not, or the companies wouldn't have been profitable pre-deregulation. The issue is that in most cities, only one company was allowed to put up (or down) wires for cable TV, and competitors can't even if they want to.
While I'm generally pro-deregulation, the very fact that single companies held "franchises" (monopolies on the ability to put up cables) means that the government was already heavily distorting the market. You can't have a competitive market until you allow any company access to its customers (a la dry-pair DSL).
@Allie928:
Why in the world would you use one of the OTA DCTs for Comcast service? The fact is it will not work. Or it will in RF bypass modem but that defeats the purpose of it. Those converters are designed to be used with OTA (antenna) signals.
Digital switchover will only affect people with no satellite or cable service.
Come on! Worst deal of the decade?!?!? Gas has to be the worst deal this decade 400 percent increase!!! You've got to keep in mind cable is a luxury, you don't need it to survive. And don't act like Dish and Direct TV don't increase their bill - 4 years ago I was paying $74.99 for the everything pack now it's $94.98!!! And that's in 4 years! Everybody needs to stop complaining about about cable when you CHOOSE to get it!
Instead of cable, I just have a combined system for my media; I have an antenna for fox, cbs, abc for free, a high speed internet connection for the shows I can't see with my antenna, and a netflix account (a real basic one) for movies. All in all, it costs me 39.99/mo. $30/mo for internet, plus $9/mo for netflix. Then again, I'm not home often enough to really get into most shows. My schedule varies enough to where I couldn't be home at the same time every night to see the same shows. So I rely on the internet to be able to see the ones I missed at my convenience.