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How Much Does a Cable Box Really Cost? The Industry Would Prefer You Don't Ask (latimes.com)
The FCC chairman insists that he is driven by a market-based approach to regulation. In a story, published Tuesday, an LA Times columnist uses the simple example of set-top boxes to argue the agency has, instead, been captured by the industry it regulates. From the story: Spectrum TV and internet customers will see their rates go up again in November. Among other increases, the broadcast TV surcharge will rise to $9.95 from $8.85 a month, and the monthly fee for a set-top box will jump to $7.50 from $6.99. It was that last charge that got my attention -- and got me thinking about the economics involved. How much do cable boxes actually cost? Why do their monthly fees keep going up when the cost of similar technology, such as TVs and computers, goes down over time? Not surprisingly, my attempts to answer these questions were met with stonewalling from industry players.
Spectrum, owned by Charter Communications, the dominant pay-TV company in Southern California, clammed up real fast when I asked how much they pay for the boxes they lease to subscribers. Nor would it comment on how much cash flow the boxes generate, or why fees keep rising even as the number of residential TV subscribers dwindles (down 66,000 more in the third quarter). Dennis Johnson, a company spokesman, said only that the 7.3% higher box charge in November -- more than three times the inflation rate -- represents a "modest increase" that is "comparable or even lower than our major competitors."
Spectrum, owned by Charter Communications, the dominant pay-TV company in Southern California, clammed up real fast when I asked how much they pay for the boxes they lease to subscribers. Nor would it comment on how much cash flow the boxes generate, or why fees keep rising even as the number of residential TV subscribers dwindles (down 66,000 more in the third quarter). Dennis Johnson, a company spokesman, said only that the 7.3% higher box charge in November -- more than three times the inflation rate -- represents a "modest increase" that is "comparable or even lower than our major competitors."
That was one reason I stopped using Cable TV services, I could not take the recurring cost of a cheap ill-made box with a terrible UI.
I would way rather spend more one time on my own box, as I do with cable modems - at least then I haves some control over quality and will not be paying a huge amount over the lifetime of use.
I have to think that a lot of people do not like TV services gated through a crappy cable company box and that is doing a lot to increase the number of people unsubscribing from cable TV content.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
They are making scads of cash on these things and the price goes up because they need more and more revenue because the cord cutters are killing the top line.
Personally, I use only a cable card, which runs $4/month and get up to 3 channels of TV at a time. Still this is highway robbery, Cable Cards only cost a few hundred dollars and I know they have a pile of them just sitting there and they charge enough just for service to more than pay for this.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
There is nothing complicated about a cable box. Comparable electronics with a tuner and an HDD for DVR storage would likely run in the $35 to $55 range wholesale. Maybe lower.
I mean that is what a Raspberry Pi package is going on Amazon.
The cable boxes can't be that powerful for as slow as they are.
Need some extra ports thou.
http://progressquest.com/spoltog.php?name=Son+Of+Son+Of+DarkRookie
So, what's the going price for an FCC chairman?
Have gnu, will travel.
The FCC chairman insists that he is driven by a market-based approach to regulation.
Oh, he is driven by a market-based approach. Whatever the market will bear that allows more money to be funneled directly to his and his crony's pockets is what he'll let slide. If he were smart enough to realize that there's a tipping point as you up the ante where people will stop paying in, he might have a different outlook, but he's a typical politician/businessman and sees the next quarter only. And he can only calculate the next quarter by taking the direct results of the previous quarter and multiplying them by whatever increased price has been decided on. Nobody ever thinks about the potential for the market to shrink, despite countless years of evidence that this market is, in fact, shrinking.
Had this issue pop up recently.
A few years back customer opens shop. After 3 shitty comcrap modems, we buy our own. Comcast at the time has no issue, we have a static IP set and it's set for 3 years. FF to last week. Customer can't connect via VPN, lotta other people depending on that static IP can't connect. I call comcast and they start troubleshooting.
Apparently they changed their policy. No static IP if the customer is using their own modem. Nope, we can't have our old IP back, big FU. We have to pay $19.95@mo + $10 modem lease to get a static from them now. Never mind that this is a bonafide business account. Cable companies are worse than lawyers and politicians, and that's a pretty low bar as is.
No one really knows but it's between $750 and $1200 per box.
I call BS on this.
If Apple can sell a 64GB Apple TV 4K for $199 and make a nice profit on it, there's no way it costs Spectrum $750 - $1200 per box.
Charter (Spectrum) is worse. No static IP without a business account. No customer-owned modems allowed for business accounts at all. They claim it's to "maintain the quality of their business network" as if they're using different channels or nodes for business customers.
I've built things with essentially the same hardware (DVRs).
If any cable company is paying that much, they're getting ripped off. (That's possible, companies often pay way too much for stuff.)
For the non-DVR version, the Roku IT is similar hardware for $129 retail (maybe $80 wholesale). The unit the cable company rents you might have a nicer case, so let's be generous and call it $100.
For the DVR version, a reciever / DVR like the Humax FVP-5000T is about $200 retail.
but somehow i fail to see cable boxes mentioned in this text:
"Unfortunately, our website is currently unavailable in most European countries. We are engaged on the issue and committed to looking at options that support our full range of digital offerings to the EU market. We continue to identify technical compliance solutions that will provide all readers with our award-winning journalism."
maybe get rid of all the parts of your website that is in conflict with the GPDR?
I'm fairly certain you're off by an order of magnitude - $75-120 seems much more reasonable for what you get, and what comparable devices cost; Especially true in Canada where you can rent or buy the cable box (but you can only use theirs). The buy option is free and clear - you go to the store, pick up the box and pay. They don't ask if you're a subscriber or anything. You can do anything with them - use them, blow them up, disassemble them, etc.
If those boxes really cost several hundred bucks to make, the cable companies would certainly not make it possible to you to buy it for 1/10th the cost with no obligations to be a subscriber.
While it's always *possible* to build something more expensive than it needs to be, you used to be able to buy a CableCard tuner retail for around $100.
According to the old regs at least, the cable companies were banned from providing equipment with integrated encryption. They had to use a removable CableCard, so that instead of leasing a device from them you could purchase your own device and transfer the CableCard to your own equipment. The thing is, very few people knew about this, and the cable companies didn't go out of their way to inform them. The kind of people who knew are the kind of people who are cord cutters anyway.
The ban expired in 2015, which not coincidentally was when a new, encryption integrated cable box appeared on my doorstep -- which was quite manifestly a cheap P.O.S.; I'd be amazed if it cost the cable companies more than $20 to acquire in bulk. CableCard boxes are no longer available from retailers.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Ya same thing with comcast/xfinity. Just another way to milk us. I wish when municipalities allow these jokers to use our poles that they'd have the foresight to think about this kind of situation. It'd be like AOL saying you can't use any HAYES compatible on their dial up. Absolutely no reason for this.
No one really knows but it's between $750 and $1200 per box.
I call BS on this.
If Apple can sell a 64GB Apple TV 4K for $199 and make a nice profit on it, there's no way it costs Spectrum $750 - $1200 per box.
Ummm ... Actually..
The CableCard (tm) thingy runs about $500 retail and you need one of those in there to decode the cable video. So I'm guessing they are paying around $400 for the hardware in bulk and have to provide their own branded software on top of that. I'm *sure* they have a bunch of people who get paid license fees for the various off the shelf software components as well. Remember this thing does all sorts of things that the Apple TV doesn't try to but it does pretty much everything the AppleTV does. The QAM tuner decoding isn't on that AppleTV box, but the streaming part they share, then there is the encryption stuff that AppleTV doesn't do.
However, they pay way too much.
I use a network CableCard (tm) tuner that gets me 3 channels, then I use an old windows 7 box to run Media Center and Xbox 360's at each TV. I only get 1080p resolution, but for TV viewing that is plenty. I also get DVR ability with Media Center which is really nice. I will morn the passing of Windows 7 when it's finally cut lose by Microsoft and I will likely punt on Cable at that point anyway. My whole investment for 3 TV's is about $400, but it's been a couple of years since I purchased it all.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
You have to add all the CableCard stuff to decrypt all those channels they chose to protect, license fees for the software and the customizations required for branding and marketing. So where the hardware may be as you say, the software and logistics of managing it all costs money too. Then there is the "free" install that you pay for too...
I suspect you may be a bit low on your cost estimate.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
My cable box was about somewhere between three and... maybe, I dunno, five bucks? I don't really remember what I paid for it, and I think originally I used it for something else before repurposing it into being my cable box.
I use it to store all my old, and many obsolete, cables, cords, and wires. Honestly, I'm not sure why I even keep them around, but I guess it's because I figure if I ever need one and I threw away a perfectly good one, I'd be pissed off at myself later. Most are screw-on coax cables, but some are push-to-fits, and the like. I also have a few coax splitters in there, because it's only natural to store them with the cables in the cable box... I might even have a terminator in there somewhere, and a 75 ohm to 300 ohm transformer or two.
That's what you guys were talking about, right?
Our reign has gone on long enough. Indeed. Summon the meteors.
Over here (in Europe) my ISP provides a set-top-box (STB). They usually rent it for about 2EUR/month on top of the normal service fee providing that you sign up for 2 year contract. Long time ago it used to be that after 2 years, the device became the property of the subscriber (nowadays they just prolong the rental indefinitely). That sums to 24*2=48 EUR for STB. The other option is to buy it outright for price of about 100 EUR, but they really do not like talking about it and push towards the rental option. Considering the complexity and terrible responsiveness, I would say that a hardware at level of RPi would do a better job.
The ISP also rents a Huawei wifi router with optical converter for about 2 EUR/month. The particular device type is not available on local market except from this ISP. I prefer to own the hardware so after learning that I cannot buy it here, I contacted Huawei and asked for a quote. They offered $63 per device, 5 pieces minimum plus shipping. Which is reasonable IMHO. This was in year 2015.
So my guess is that we talk about 50-100 per device. Of course cheaper for a big ISP due economy of scale.
I avoid Comcast like the plague. Cut the cord years ago. Even back then there was a line of people returning equipment. Lucky for me I have an internet provider alternative. Comcast business model is based on raising prices without offering anything new. Their expertise is in inventing new fees or claiming taxes have doubled or even tripled month to month and calling customers cheap - "it's less than a $1, what's the big deal?". My cable bill always increased between $0.10 to $1.99 per month every month (using online bill pay provides great history information). You can call and threaten to cancel you can get it reduced but that is time consuming, annoying and doesn't last since the increases keep on coming anyways. They count on people being to lazy to find an alternative if they only see pennies increase each month (most people sadly don't put it together that over time it adds up). Whenever they come to try to sign me up again, I always ask whether they can give me any guarantees that my "fixed price plan" will not go up for the 2 years they are offering it to me, but their answer is always "the plan is fixed, but fees and taxes may change".
With 5G deployments coming soon, they will have even more customers fleeing as that that will give many customers an alternative for internet where Comcast was the only choice before.
I just canceled my account with DirectTv
I had a HD Tivo branded box, which about 5 years ago would have cost me about $300 (I can now buy one for $200). However, owning the device wouldn't stop their monthly tax of $15 ($10 for the DVR, $5 for Tivo service). On August 2nd they merged my account with AT&T's RC1 system and turned off the DVR and Tivo capabilities (all prior recorded content was also no longer watchable). After calling them about 7 times they told me their was nothing they could do and to stop calling.
So I did.
Instead I spent my time looking at streaming services, what we watched as a family, and what the costs were. I also ended up canceling my DSL with AT&T as well (they couldn't offer me speeds fast enough to stream tv).
My final solution was to go with Comcast for internet which is about $30 a month (40x faster than DSL for about 75% the cost). I bought a new modem for $75 shipped which supports downloads 10x faster than my current package (still way cheaper than paying their $11 rental fee on a modem). I already had a good wireless router and a 10GB switch which all worked with the modem.
I went with Sling for typical tv channels we watched at about $35 a month ($25 for the package, + $5 for kids channels, + $5 for DVR). I also bought a $90 Roku box (Roku 4, wired ethernet, 4K output, bluetooth remote).
So the breakdown of costs:
DirectTv + DSL ~ $132 per month.
Sling + Comcast ~ $65 per month (plus $165 one time equipment cost).
So in 2 1/2 months I will be in the black. I also now have way faster internet; and with streaming I can watch what I want when I want it. Roku also has a ton of old free shows and movies which I'm still binging on. I now no longer have any rental fee and I can cancel anytime I want with no penalty fees.
Still the best bit was calling DirectTv and canceling the whole thing. Then asking to be transfered to the DSL department so I could cancel that too.
Although CEO pay is certainly astronomical, there used to be public policy after the AT&T breakup to encourage customer premises equipment (CPE). Your own landline phone. The cable or set top box was an exception to owning your own stuff until sufficient commotion was made to let people have their own stuff.
If you have cable, you can very likely get your own stuff. Your local big box electronics retailer knows which one works with which provider in your area. It's fine to rob that provider of their insane rental monthly charges for cheapo routers, which is the point of the post.
And yes, they will nickel and dime their clientele because it beefs up the bottom line and pleases Wall Street and stockholders. This is not about consumers anymore, this is about a bought-off FCC and elected government in the USA. Ask questions, then: Vote.
---- Teach Peace. It's Cheaper Than War.
. No customer-owned modems allowed for business accounts at all. They claim it's to "maintain the quality of their business network"
I've got Comcast Business, with a force-rented modem. I understand that it's actually for support -- if you call with a problem as a business customer, you want it fixed. And they don't want to futz with yet ANOTHER modem, and what's it's password, and what do you mean you don't know?
/24 network. Not that it bothered him at all, but apparently no one else bothers to do so.
Besides, if you're a "business customer" then that's just another ongoing cost of doing business, no big. This way they know *everything* up past the demarc to your edge of the network and they know EXACTLY what to expect once they get there.
They also give you (most of) the controls for it as well, so you can make reasonable changes. One of the techs was surprised that I had changed from their default
If the universe is someone's simulation -- does that mean the stars are just stuck pixels?
I can see why you posted anonymously, boy would I love to have you as a customer! If yet really think it is between $750 and $1200 per box then I could make somewhere in the region $700 and $1180 profit on each one I sold you!
I worked once directly with an SOC supplier that makes set top box solutions. We only needed 7,000 systems making us a tier 5 customer, their lowest rank. I asked what a tier 1 supplier was, apparently anyone who orders in 1,000,000 up quantities. When I asked who could possibly be placing orders that size I was told set top boxes for cable companies. Based on my experience manufacturing similar stuff I would put the current cost of a cable set top box in the range $20 to $50 depending on the features offered.
It'd be like AOL saying you can't use any HAYES compatible on their dial up.
It wasn't until 1968 that AT&T allowed you to use any modem/phone/device but theirs on the telephone network.
Actually, they know all the client devices connected as well.
I was experiencing an outage a few weeks ago. My systems are really stable, so I assumed it was Comcast's fault. I rebooted their router/modem, that didn't fix it. I called in and had them reset it remotely through the automatic system. No joy.
Called back and spoke with someone who could actually help. For once I wasn't an asshole and asked for help nicely. Learned long ago that about 10% of the time, I'm wrong, so best to be nice. She connected to their modem/router in my business and started listing the connected devices. I have "guest" devices connected on their 10.x.x.x subnet but have the static IPs passed into my router via bridge mode so I don't need to trust their security settings. Anyway, she didn't list my router so I knew that was the issue and bounced it. It had been patched a few days earlier. That was 3+ weeks ago and the router has been solid since then and patched 2 more times.
With just 1 static IP, I think you can talk your way into using your own router/modem on a Biz account. People do. With multiple static IPs, the router uses BGP and could accidentally take over all the IPs for youtube, just like Pakistan did a few years ago. Best to let Comcast's automation handle all that. I'm not happy with the $11.95/month rental fee, but it is what it is.
Comcast allows you a modem. In Charter territory, the forced modem is a modem/router. This is where the problem comes in, honestly.
I'm OP anon from before. The person above is correct. The prices are heavily inflated. I will explain why. I worked at corporate in Philly and while yes I didn't know any hardware folks my team did take boxes apart and do user testing.
First of all it's not one box. There's constant version changes. There are a few dozen SKUs in the system from dozens of manufacturers. Over the years there are many variations of boxes in the wild. R&D keeps fucking with them continuously. Job security masked as "improvement".
Details right? Okay.
They run linux. They are full computers. The generation before the current one includes a 5400 RPM HDD for recording functionality. They run a NodeJS powered JavaScript application to render the front end and generally speaking that things is slow as fuck and has to be compatible with all the dozens of SKUs so it's a memory leaking piece of shit written by below average engineers in center city Philadelphia. The thing leaks memory so badly that all the boxes are sent a restart signal once a day to avoid total lockups of the machines. They all send plain text logs to Splunk all day every day apache2 style. There are literally millions of error codes that get thrown daily by the boxes. Part of my job was to literally parse this crap from Splunk and spit out charts that would get put into Slack for execs to regurgitate in their fucking reports. Engineering can SSH into boxes at will.
The boxes have lower memory and have shit CPU except with dedicated real-time processing video chips for the actual video. And by real time I just mean the tuner to the output as well as the 'overlay' would render kinda fast with a decent on-board video processor for that kind of stuff. The rest is yes very low end crap. But remember the buy orders on these things are in the tens of thousands at a time. Unless someone is a new customer or we have a tech come out we will not try to upgrade someone's box. That can cause all sorts of problems for none technical people and technical people alike.
The new 4K boxes are much smaller. They don't have hard drives and are designed to play your DVR recordings from the cloud. Which itself is a giant R&D mess. Oh and we're not even talking about the Cable Modems which is a whole other device. Also around $500-$600 for those. When I left they were testing switching to AWS for some VoIP stuff. Testing showed a 3x performance improvement from AWS servers compared to in-house devops. Not surprised lmao.
There's also tons and tons of waste. The Comcast buildings in Philly have data centers in them. There's brand new boxes and servers from 10 years ago sitting in boxes unopened. Don't worry they will just increase your bill to pay for it all! Like I said. Fuck that place. I have FiOS at home.