In recent years, cable companies and broadcasters have squared off in nasty, public spats that sometimes result in blackouts for millions of viewers. The broadcasters say they aren’t being paid properly and the cable companies claim they’re on our side, trying to keep costs down (though we always end up paying more). These battles will likely only get worse, with analysts predicting that the cost of content will continue to increase.
The Wall Street Journal reports that the average amount of our cable bill that goes to pay carriage fees to broadcasters is expected to increase 36% by 2018, according to estimates by media research firm SNL Kagan.
Currently, providers pay $28.32 for about a dozen channels, but that cost is expected to increase 36% by 2018 according to estimates by media research firm SNL Kagan.
Which network charges cable providers the most each month per customer? ESPN with an estimated cost of $6.04. That figure doesn’t include ESPN 2, which is also among the 10 most expensive channels at $.74 per customer. By 2018, SNL Kagan estimates providers will pay $8.38 per month to air the sports network.
The cost for ESPN is nearly 43-times the median average price of 14 cents paid for each channel a subscriber receives. The next most expensive network is TNT, which charges $1.48 per month per customer. Among the least expensive networks are Nick 2, Hallmark Movie Channel, MTV Hits and CNBC World.
It’s worth noting that Comcast-owned NBCUniversal is responsible for three of the 10 most costly cable channels. USA clocks in at $0.83, SyFy costs $0.27 and Bravo costs $0.25.
While Kagan predicts steep increases in the cost of content, the analysts expect that consumers’ cable bills won’t increase as dramatically. The average basic service currently costs $54.92 per month for consumers, while Kagan’s data expects the cost in 2018 to reach $61.76, a 12% increase.
That figure is generally in line, if not a bit lower, than what was detailed in a FCC report earlier this year. That report found the most basic cable package increased by 6.5% in 2012 alone.
If cable companies aren’t astronomically increasing our cable bills by 36% to make up for the amount they pay to networks, how are they making ends meet?
There’s no need to worry about the poor little cable companies, because WSJ reports most generate hefty profits through bundling cable with phone and broadband service and charging fees for equipment.
How Much Cable Subscribers Pay Per Channel [The Wall Street Journal]