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Cord Cutting Caused By 74 Percent TV Price Hikes Since 2000, Says Report (dslreports.com)
A new study by Kagan, S&P Global Market Intelligence finds that cord cutting is being caused primarily by a 74% increase in customer cable bills since 2000. From a report: That increase is even adjusted for inflation, and it should be noted that individual earnings have seen a modest decline during that same period, making soaring cable rates untenable for many. This affordability gap is "squeezing penetration rates, particularly among the more economically vulnerable households," the research company added. As their chart illustrates, prices for multichannel packages have steadily risen from just below $60 a month in 2000 to close to $100 in 2016. All while incomes remained largely stagnant. As customers grow increasingly angry at cable TV rate hikes and defect to streaming alternatives, most cable operators are simply raising the price of broadband (often via usage caps and overage fees) to try and make up for lost revenue. And because most parts of America still don't really see healthy broadband competition, they can consistently get away with it.
Did you miss the last sentence that said most of America doesn't have healthy broadband competition? That means it's not a free market.
They've been telling us online piracy was the cause of it, not their price hikes.
You're right, don't believe that inlation since 2000 has been 100% (doubling the 74% post-adjusted increase as you have).
And I'm right. From 2000 to 2018 it was 44.5%.
I also don't believe your base rate, because there were a number of stories in 2016 reporting that the average had just crossed $100/mo.
And I'm right. In 2000 the average was reported to be about $40/mo.
That means that your numbers are indeed swampland-sales quality.
Dumb-ass faux-capitalist/monopolists control entertainment delivery and content. Technology starts under-cutting their rent-seeking behavior. Rather than respond appropriately, ala carte pricing, etc., they double-down by raising prices and cutting "Customer Service" (a new oxymoron!) and are shocked - shocked! I say! - when customers bail.
Fuck 'em. Couldn't happen to a greater bunch of guys outside the music industry.
Have a look at a list of countries ordered by standard of living. There's different ways of measuring that, but most shake out about the same.
Now take a look at the common factor among them. Strong social policies. No, not communist, nor entirely socialist, but a mix of socialist (*gasp*) policies and regulated capitalism. It's almost like using limited socialism in some areas and limited capitalism in others works better than either alone.
Maybe the answer to the problems in the US is more capitalism, less regulation and an 'I've got mine' attitude. But probably not.
Now, you're probably either a troll or a pot stirrer, so this isn't really aimed at you. I'm hoping that chipping away at the reflexive socialist=bad that crops up might make room for some reasoned discussion on actual change and not just another round of more-of-the-same.
Look at the programming. Who want's 600 channels of Reality TV? Does anybody watch that stuff? It's crap.
Look at Netflix, something like Luke Cage or Altered Carbon. I just can't find content like that on cable, even with premium channels. And then there's the cable box rentals. It's over $200/month, and my local cable company kept dropping the sound out, or the video out, during climatic scenes.
At one point I realized I could drop cable, still have unlimited internet, and save enough money that I could BUY A NEW DVD every day of the month at a local store with change left over. Snip Snip. Goodby Cable. Goodby commercials & advertising. And good riddance!
When I look at my Satellite channel lineup ( full package* except premium channels. Eg: No HBO, Showtime, etc ) a rather large percentage of channels are of material I will never watch.
Channels:
In languages I don't speak.
Religious channels.
Home Shopping style channels.
Infomercial channels.
When I actually took the time to cull out all the crap I didn't want to see, I was left with maybe twenty channels in all. Maybe.
So, perhaps the cord cutting isn't solely because of the price hike, rather the fact the typical user gets a really piss poor amount of content to watch and they have begun to question why they're spending so much on what is, in reality, so little.
*I only have a dish because I get it at a crazy discount. If I was paying full price for the available content, I would not have it at all.
I sometimes talk about cord cutting with my elderly fixed income customers, but it's not a rewarding experience. They find the alternatives confusing, and I haven't figured out a good way to explain things to them. Even just clarifying that cancelling 'cable' is not the same thing as cancelling all services from their cable company involves more time than one would think. Then I find I have to start getting into:
Bandwidth caps: "I like to have the tv on in the background 16 hours a day"
Service confusion: "What channels do I watch? I don't know."
Lack of a familiar interface: "How do I surf channels?"
What usually breaks me is when they mention in passing that they have a "VIP" bundle. When I have to get into alternative voip services and devices on top of streaming services and devices, it's time for me to give up. At that point I've been clarifying stuff for fifteen minutes and have to help someone else google the right ink for their printer.
What used to cost us $60 cost over $150 when we dropped cable. We went from 20Mb to 100Mb, picked up Netflix, Hulu & Prime (commercial free, multi-viewer packages) and still came out at least $40 cheaper a month. We can't watch everything we might want, but we can always find things we actually want to watch.
Split the hair any way you like. Cable's been constantly rising in price and there's no added value for the added cost. Cable isn't worth the money any more.
No, I'm disagreeing with facts. You factually claimed an inflation rate that is incorrect to come up with a "150% raw increase" that is false -- it was 107%. You also alleged a service cost in 2000 of $100 despite a summary that expressly stated the packages were "below $60 per month," and came up with a current service cost of $250 today despite a summary that also expressly stated that service costs were $100/mo in 2016 -- but now act as if people reading your reply would not infer that the "service" that you were referring to was the same service being discussed in the summary. That was deceptive.
Your math may be perfectly accurate, but your model, basis, and conclusions are bullshit.
You try again.
And that, kids, is how the free market works
No, cable TV pricing and service is pretty much the poster-child for what happens when we don't have enough competition in the market. The new internet streaming services you get at $10-15 per month are more indicative of the free market. Netflix and Hulu can't arbitrarily raise prices at will because they're competing with each other for market share.
Irony: Agile development has too much intertia to be abandoned now.
You forget that this so called "free market" is exactly what happened here. Without any regulation (thus "free market"), the biggest providers push the smaller ones aside and gain an monopoly. After that it's raising prices and raising prices, because there is no competition left.
Yep - Isn't "free market" great?
This seems to be a common misconception. The "free market" doesn't preclude regulation. It relies on it. Without regulation, you simply have anarchy, and a free market can't function correctly - or at least, as efficiently. From ancient times, the most prosperous free markets have co-habited with a strong government to provide oversight and regulation, which offers a safe haven that in turn provides for a greater focus on economic development.
Also, a lot of the monopolistic tendencies of cable companies are due to regulation of the WRONG kind, preventing competitors from even entering the market in certain areas, or preventing local co-ops from forming to offer an alternative option. Like almost anything else, regulation can be a double-edged sword depending how it's used, either helping or harming consumers.
Irony: Agile development has too much intertia to be abandoned now.
When I cut the cable 4 years ago, a big part of it was that there was nothing that I wanted to watch. The speciality channels that used to have interesting content were full of reality garbage. The networks were full of dreary CSI spinoffs and knockoffs. I didn't subscribe to the premium channels because cable was already expensive enough. Overall, cable just wasn't worth the money. The only thing I watched was the weather, and even that had gone from detailed forecasting to dogs playing in the snow. I'm willing to pay for quality content, but it just wasn't there. But there's always something to watch on Netflix or Crunchyroll.
------- Mark