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Cable TV Price Increases Have Beaten Inflation Every Single Year For 20 Years (businessinsider.com)
An anonymous reader quotes a report from Business Insider: The pay TV industry is losing customers, but prices continue to climb. In fact, for U.S. cable TV in particular, price increases have outpaced inflation for every single one of the past 20 years, according to a recent FCC report surfaced by CordCutting.com. Every one! In 1995, cable cost $22.35 per month, on average. In 2015, it was $69.03. Now, it does makes sense for prices to go up for goods like cable as long as there is inflation. But cable's increases are more than double that of inflation. On average, cable prices went up 5.8% yearly for the past 20 years. Inflation clocked in at 2.2% per year, on average. Though there has been grumbling about the high prices of cable for quite some time, it has lately taken on a more serious air. That's because there is evidence that the pay-TV industry is experiencing a hiccup -- or the start of a long-term decline. The pay-TV industry lost 800,000 subscribers last quarter, according to the research firm SNL Kagan. "About 82% of households that use a TV currently subscribe to a pay-TV service," Bruce Leichtman of Leichtman Research said in a statement last month. "This is down from where it was five years ago, and similar to the penetration level eleven years ago."
>"Cable TV Price Increases Have Beaten Inflation Every Single Year For 20 Years"
I don't think any of us needed a study to tell us this. Although my Interenet speed has gotten better, and I now have HDTV channels, the *quality* of the content and the selection of quality channels has NOT improved. If anything, it has gotten worse and worse.
This is unsustainable and why you are seeing people jump ship with other options just as soon as they could, and most of those options are only available due to Internet streaming (which is consuming TONS and TONS of bandwidth and increasing exponentially).
Cable monopolies are far too used to being the only game in town and raking in tons of cash doing so. They need to start offering lower-priced a-la-cart channel options and soon or their slide will continue. But don't think for a moment they will just suffer alone. Since they are still monopolies for Internet in most regions, they will start to try and make up for their lost profits by raising the prices of their Internet services. It is already happening.
It's like they don't know I don't have any real choices for cable or high speed internet and can't switch!
/sarcasm
When the cost of luxuries increases faster than inflation, it is actually a sign of improvement. No one needs cable tv; they pay because they enjoy it and have money to spare. If consumers are willing to bear a higher cost for a luxury, it shows that they are doing better economically.
The number of available channels, and the infrastructure to support the increased bandwidth (think HD, too) has also gone up faster than inflation.
"National Security is the chief cause of national insecurity." - Celine's First Law
The bullshit they have charged, the nickle and diming on cheap hardware, lack of competition lack luster or out right lying of services....
Just die.
Prices have gone up and the quality of the programming has gotten worse (which I didn't think was possible). The only thing keeping them in business at this point is that in many markets the cable companies are the only source of broadband internet. I would kick Comcast to the curb tomorrow if there was a broadband alternative in my town. The INSTANT there is one, I'm gone.
Pass laws that force cable companies to sell internet separate at capped pricing where they can not punish you for not getting cable packages.
recently moved to florida from the midwest and I get 4X the bandwidth for 1/2 the price and they cant charge me extra for not getting cable tv. a cheap antenna gets me about 18 channels if I really think I need to watch some stupid live sports event. or live news.
$39 a month for 100mbps/10mbps Comcast was raping me at $70 for 15Mbps/1.5mbps in Michigan
Do not look at laser with remaining good eye.
That was the whole point of paying for TV. No ads! And, boy, was it worth it. Now you've got the worst of both worlds, you pay out of pocket AND they crush you with commercials. Frankly, the reason TV is being taken over by Netflix et al. has everything to do with getting rid of ads.
"We receive as friendly that which agrees with, we resist with dislike that which opposes us" - Faraday
Congratulations on getting a first post. Does this mean you qualify for GNAA membership now? What is your handle?
then the customers must think it's worth the expense. As for me, I'm just running on a borrowed internet connection. Cable TV or internet is too expensive in my view.
But then, I don't watch sports, so I'm not held hostage by a need to watch ESPN.
If you think I voted for Trump because of this post, you're wrong. I voted for Dr. Jill Stein of the Green Party. Again.
In many school districts it's necessity. The last 4 years of my kid's public education all her homework was delivered online (the district couldn't afford books, budget cuts to go with the tax cuts).
Also given the number of alternatives (online games, video games in general and tons and tons of streaming) there should be _downward_ pressure. That's not a sign of a healthy economy. That's a sign of a monopoly without any regulation.
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Explains why there are a lot of cord cutters. That, and about 75% of what you are forced to subscribe to is JUNK.
Inflation measured accurately, not heuristically, is way higher than 2-3%. See shadowstats.com
Could running a network in the US be very expensive? To hire great staff and keep a network connected everyday?
Hardware upgrades are really, really expensive in the USA for some reason but have to be hidden.
That would point to inflation numbers been kept low or huge hidden expert staff costs in the US.
Are staff and contractors enjoying top expert pay over the years? Legal teams to keep the networks safe per state are expensive?
Generational shareholders like profit, yachts, jets and see local consumers as a for profit herd?
A shrinking number of connected people have to pay for the staff, ensure profits and cover more costs.
Big brands always wanted to expand into content and have been building their own hidden production empires?
Expect amazing new in house movies and shows soon?
Yachts and jets.
Domestic spying is now "Benign Information Gathering"
(I don't live in the US but have seen prices go up as well)
Our HOA runs owns the cable in the ground for distributing cable TV and I am managing the contracts, technical aspects etc with the cable companies. This enables us to get a better deal for all who wants cable than what people get from their listed prices. The explanation we hear every time the prices go up, are because of the channels that have sports programming included that are responsible for the price hikes. These channels have a few popular TV shows, mixed in with very expensive soccer matches.
So it is sports that costs the most, even when you leave out dedicated sports channels.
More and more people are switching from the full package to the medium package or the small package(where people really should consider just getting those channels over the air). And people are also dropping the extra channels that you pay for individually.
Personally I haven't had cable TV for 4 years(iirc) because I don't have any interest i sports and so cable tv with all the commercials are not really worth it for me.
In economics and in public-choice theory, rent-seeking involves seeking to increase one's share of existing wealth without creating new wealth. Rent-seeking results in reduced economic efficiency through poor allocation of resources, reduced actual wealth creation, lost government revenue, increased income inequality,[1] and (potentially) national decline.
Attempts at capture of regulatory agencies to gain a coercive monopoly can result in advantages for the rent seeker in the market while imposing disadvantages on (incorrupt) competitors. The idea was originated by Gordon Tullock and the term was coined by Anne Krueger.[2]
https://en.wikipedia.org/wiki/...
Not just good ideas, they're the laws of economics
technology improvement should lower existing prices for subscriptions to services (even dial-up accoustic modem links to) like AOL, COMPUSERVE, JUNO, and EARTHLINK, and others. I know people paying $90 for Time Warner cable in Los Angeles for overpriced internet access and a corded phone in a 3-bedroom house. I think a 2-phone-line house using dialup is the least expense, and the more mobile-phone-friendly websites means dial-up internet access just gets MORE EFFECTIVE of a modern useage in terms of user experience and server load. thankyou
With the programing available, $1 a month should cover it...
I remember when cable first started and they promised that the price would never go above $6.95/month.
High cable prices are the fault of manbearpig - I'm super serial guys.
Seven puppies were harmed during the making of this post.
More like the army of accountants need paid.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
I haven't paid for TV in over a decade. I do pay for FTTH, I could get tv for "only" another $20 - no.
Pound sand, Netflix will crush you all.
Eventually the packets will get delegated a utility; the tremendous markup from content funds the inefficient monster that are the tier-1 broadband providers.
Governments should own the infrastructure (fibers on poles). Companies should provide the service. That's the long term fix.
It might not even matter if LTE gets fast and dense enough.. Will kids care?
..don't panic
Frankly, the reason TV is being taken over by Netflix et al. has everything to do with getting rid of ads.
True but they have to make it attractive to get people to take the plunge and switch. Wait another few years until Netflix starts to reach subscriber saturation and their revenues are no longer increasing due to growth. Then they will then try to start adding in the ads to increase their revenue and/or have over the rate of inflation price increases until the next technology comes along to make them obsolete and the cycle can begin again.
So, what were sports players being paid 20 years ago compared to today ?
How big were stadiums, how much did they cost, and what is their life expectancy ?
These sports teams/stadiums pass on the costs to those that attend the games and those that watch, and the costs have gone up in a BIG way for broadcasting
The 2024 Olympics is expected to cost over 4.6 Billion Dollars (it will probably cost well over 6 Billion with cost over runs).
Intertia - you nailed it! The Cable companies plan was to get more and more set top boxes, and package programming so that you need to get the gold or you wont get some channels you want, Up Up Up goes the bill !! The triple play is DEAD.. Lets be clear.. VOIP is a joke of a service. Get OOmah and switch to double play. then switch more and more to Interweb based TV content, and then you only need the interweb. Problem is that the cable companies have a monopoly lock on so many communities. Verizon was supposed to pave NJ with Internet, and we've been paying since the 1980's was it??? We have to put some competition back into consumer Tech like Internet Service providers.
Housing, schooling, medical. It may not have gone up each year but averaged over any length of time their numbers are significant. Which makes one question the fundamental weighting of the inflation indexes.
My own personal inflation indexes are probably 3x what the published one is. Particularly if one breaks out the "wants" vs "needs". In the US its basically impossible to be a nomad or farm public/common land. So, I need a house, I need gas to drive to work, and I need to eat something that isn't McDonalds. If it weren't for the fact that I'm now one of the "privileged computer engineers" I would be living paycheck to paycheck unable to afford a new dishwasher when the old one broke. The particularly damming thing, is that because of this basic cost of labor/etc many things in the US have become so expensive that hiring someone to fix a car/reroof a house/etc can easily cost days of my inflated pay rates. (A new root installed by 4 guys on my house in two days can cost more than 2 months of net salary). Retail rents in front the wamart in the not so great part of town can easily exceed $15 a square foot.
There are people getting insanely rich from all this, its just none of us actually working for a living.
subscribers, only you can kill cable.
for cable internet because it's the only game in town that has decent speed where I live. We have Netflix, Amazon Prime, a large DVD/Blu-ray library, and an amplified indoor HDTV antenna that gets all the channels I want. I plan to install an outdoor antenna later. I'm probably going to end up getting HBO's streaming service in the not too distant future. Still cheaper than cable TV. There's also a lot of free programming on YouTube as well.
"You'll get nothing, and you'll like it!"
Inflation is a weighted average of multiple commodities so why wouldn't there be some which are above the said average?
More importantly, inflation has beat the minimum wage every year for some twenty-five years running. Then people complain that we "can't" raise the minimum wage because it would harm businesses. Well, fuck 'em sideways if they can't pay a living wage. Fuck them right in their fucking ears. They obviously aren't important.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
... "About 82% of households that use a TV currently subscribe to a pay-TV service," Bruce Leichtman of Leichtman Research said...
That statement could use some clarification; I consider myself to be a cord-cutter, with an internet-only broadband connection, (no landline and no "cable" TV subscription, premium channels or otherwise) but it would be easy to argue that I should be included in this statistic, because I subscribe to both Hulu and Netflix. Which is it? Am I really a cord-cutter, or am I simply subscribing to the next generation of "premium" services?
Is it the just content distributors (cable and satellite) fault or is it the fault of the content creators? Or both? Is it a 50/50 split? Or is one party more at fault?
In the last 5-10 years look at the number of local TV stations that changed their status from "must carry" to "retransmission consent".
Does the practice of bundling channels contribute to the growing cost? Would it be cheaper to have a la carte?
How does the cost of infrastructure upgrades and repairs affect this?
There are so many reasons why these prices have increased in this industry. I don't know that it's fair to pin it on one group.
"A plan fiendishly clever in its intricacies"- Homer Simpson
Geez - I decided to read the article including the FCC document.
Expanded Cable (level of service referenced in the blogs) has increased as described. The number of Channels delivered in the service has also increased from 44 to 181 - yet price per channel has decreased from $0.60 to $0.45.
What I didn't notice was whether the 2015 prices included HDTV? I know I pay extra to get HD (even though the world is HD - but I digress) - and I can't think of any "boost" to prices back in 1993. Set-top boxes rentals existed. Plus - cable operators now pay a local-TV fee where that was "free" / included. Meaning - the pie is being split by more takers. And as we all know companies like Disney/Fox/etc fight over how much the cable companies pay them -- so it isn't just "the cable" operator raising fees.
In a market based economy the provider never leaves money on the table !!! duh.
Maybe cable companies are better at measuring inflation than people posting inflation numbers?
The government wants you to believe that inflation is low but how is it that every monthly expense I have has gone up (with the exception of natural gas) every year for the past decade and in some case e.g. health insurance, has outpaced inflation by significant double digits? Take the red pill, folks. They are blowing smoke up your collective ass.
This has been an even more magnified issue in Canada. The CRTC which is the group in charge of regulating the industry has tried in the last year or so to curtil the companies by basically saying that they must A) offer a basic package that costs 25$ and B) have a-la-carte options available.
So of course the first thing that both (because there is really only 2 in Canada, Bell and Rogers) companies did was obey the letter of the law whilst totally destroying the spirit. So the both offer a 25$ package. However they fill it with garbage, then attached a ton of fees to it, then make you pay rental fees for boxes and the like, so in the end you get a terrible service, that costs about what one of their other "discounted" services cost. Similarly with the a-la-carte options they basically price them out of existence and don't offer certain key popular channels should you choose those packages. All of this in the end so that they can report back at the end about how few customers want those features, and how most would like how they normally do business.
I believe the CRTC is now looking at what to do about this. We'll see if there is a slap on the wrist or any real action to support change. Anyway right now the big boys are just playing games and daring the regulator to do anything about it.
There's a subtle difference between "The 20 year average increase in X was higher than the 20 year average in Y" and "The increase in X was higher than the increase in Y every single year."
What a lot of people don't realize is that, when you pay your monthly cable/satellite bill, a portion of your money goes to your local stations. Same goes for the non-prime cable channels. This is why, every so often, we see these fire-and-brimstone things saying things like "you are about to lose X channel...". Usually what happens is the cable/satellite companies raise their prices, and the station/channel owners see that as an opportunity to hit them up for more money. If the cable/satellite company doesn't want to pay them more, they'll cut the channel off.
I am of the opinion that, if you run commercials on your station/channel, you don't need to receive anything from the cable/satellite companies. If you can't make your station/channel survive without getting that money from the cable/satellite companies, you have no business being on the air. The simple fact of the matter is, if you are able to receive your local channels via an antenna, you wouldn't be paying anything to them in the first place. This is why these fees are absurd, especially to the local channels. But if you are in an area that has very poor reception of your local channels, you either have to pay for cable/satellite and pay a premium, or go without.
You can thank the Telecommunications Act of 1996 for all of this. I really wish it would get repealed. No good has come from it. It rewards local TV stations and cable channels for having shitty programming and running the same 6 shows all the damn time!
Wow, every year for 20 years? What a coincidence, I stopped buying cable TV 18 years ago.
I haven't missed it although I heard The Wire was a good show.