Cable still strongarms customers who keep shelling out
David Johnson May 24th, 2008
With all that we talk about online video disruption, the MSOs (that’s cable companies to you and me) are still making bank. The New York Times reports that cable prices have risen 77 percent since 1996, roughly double the rate of inflation. The average customer is now shelling out $60 a month for a cable package, which they only watch around ten percent of the content. Of course, cable companies say that the pay per channel model that consumers crave will end up in higher prices in the end, but I always ask the unasked question: If cable channels can’t survive as pay for play businesses of content meritocracy, aren’t they currently gouging their advertisers for viewers that aren’t really there?
9 Comments Add your own
1. StampinShop.com | May 24th, 2008 at 7:22 pm
Not only that- the cable networks are raking it in too- earning both affiliate and advertising fees. MSO’s are also getting bribed (legally with “marketing money”) by networks for channel placement. All of which is to the detriment of the consumer.
I wonder how HD will come in to play with a pay-per-channel model… will most HD customers want many, or even any non-HD channels?
2. Joel Price | May 24th, 2008 at 9:13 pm
More and more I’m getting to the point that cable is not worth the money. It’s much like my landline phone, it took me a few years to dump it, hindsight now tells me I should have done it sooner. Cable is next to go for me.
3. Amanda E. | May 24th, 2008 at 9:24 pm
Of course the cable companies are raking in the cash with customers, advertisers and affiliates - in most municipalities, they are franchised monopoly and therefore are the only game in town if you don’t want satellite or OTA for your television viewing needs.
4. Dan | May 24th, 2008 at 10:25 pm
Once again Broadcasters are leaving money on the table and missing the boat. I just can’t believe how bad
broadcasters are at marketing.
They provide free, over the air signals. All you need is an antenna etc,. for nice HD pictures. But broadcasters themselves don’t know how to hook up antennas apparently, so far be it from them to actually run promos explaining how you can save $60 a month by putting in your own antenna. It’s hilarious. They really have just thrown in the towel.
But Wait…. broadcasters will soon start charging you to see their signals too, you know the ones that are free over the air, where we americans have given them spectrum free to use, they will be charging you for mobile access very soon. What it is, $15 a month?
Don’t you know love it?
Dan
5. TR | May 25th, 2008 at 11:56 am
We just got a digital converter box for cheap (some sort of coupon program) and are experimenting to see if the programming, which is pretty robust around here, is good enough for us to give up cable. (I personally would give it up fast but the other two members of the family are a little nervous about reduced video-entertainment options.) Right now, the only thing we would miss would be the CBC. Maybe if we put a REALLY tall antenna on the roof (further angering the neighbors who are already upset about our hedge)? But I digress. Anyway, as small businesspeople working to get into the black, the $60/month for cable (WITH NO PREMIUM CHANNELS!) is looking like money we’d rather spend on something less discretionary. (Better computer!)
6. Anonymous | May 26th, 2008 at 4:57 am
I ditched them mangy varmints in the spring of ‘96!
7. Hussman | May 26th, 2008 at 6:25 am
Dan has some good points - If someone would offer DTV packages that affiliates could pick up, that did compete with cable, and then promote the hell out of the free aspect, it could make a small dent.
8. coffee | May 26th, 2008 at 10:07 am
Would the logical extention of that argument be that - you don’t watch all the programming on the channel, so why not pay just for the programs you want to watch? That model is easier to pull off on an iTunes platform or On Demand, so why have channels at all? (snark) I think the idea is the stronger shows on a channel (or a network) support the weaker ones, and the stronger channels on a programming tier support the weaker ones. I guess it does stink for a consumer if all one wants is SciFi or ESPN. I don’t think most smaller channels would survive on a pay-per-channel model. Such a model would also discourage rollouts of competitive MDS (that’s multichannel distribution system) platforms. I haven’t even mentioned how the economies of the television portion of the cable platform contributes to other products (like internet).
9. online tv | May 26th, 2008 at 11:46 pm
I agree Cable Tv is getting way to expensive per month. If it wasn’t for the sports channels i wouldn’t even have cable. Big Laker fan here and most of there home games are on Cable tv. If it wasnt for that i would have no problem with just watching regular tv.
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