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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.
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.
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'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.
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
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?