Why Is Cable So Expensive?
If you are noticing an increase in your cable bill, you are not imagining it. Due to channel bundles of the most popular brands (Disney’s ESPN is one example), especially sports channels, are causing the price hike. A discussion that has resurfaced is the idea of bundled packages (a cable mainstay) vs. ala carte programming. According to the Bureau of Labor Statistics, the cost of cable has risen 77 percent since 1996. Despite this, cable subscriptions are growing at a robust pace, despite competition from Apple TV, Netflix, Hulu, and Crackle.
Brief History Of Cable
According to the National Cable & Telecommunications Association (NCTA), cable TV originated in the U.S. in 1948, as a way to improve “poor reception.” The Cable Act was established in 1984 to provide regulation, but ultimately its growth was hampered in 1992, dubbed the 92 Act, spurning the growth of satellite and “wireless cable.” Eventually, new technologies such as HDTV and VOD (video on demand) services provided customers with even more choices and opportunity to view content in a variety of ways.
Cable In The Present
Today, the cost of sports programming (bundling those channels) is helping to cause a steady increase in cable bills—even if you are not a sports fan, cable subscribers are paying the price. It has been reported that some customers are seeing at least a $2 increase; some have noted more. The Wall Street Journal’s Market Watch reported that cable has nearly doubled, and customers pay an average of $90 per month. According to the NPD Group by 2020, the average cost of cable could be $200 per month.
Americans love their cable TV, and with hundreds of channels to choose from, they are still sticking with the devil they know and understand. But Cablevision believes this to be egregious, particularly when customers are paying more out of pocket for programming they actually do not view; with sports channels taking the prize. A lawsuit was recently filed by the Cablevision Systems Corp. in hopes to take Viacom to task for this.
In essence, Viacom is alleged to have coerced Cablevision to pay for and provide 14 less popular stations in exchange for providing MTV, Comedy Central and Nickelodeon. These agreements prevent consumers from customizing their cable packages. Hence, you wind up with dozens, or possibly hundreds of channels you will never watch.
Some consumers, according to an NPR (National Public Radio) report, are embracing an action called “cord-cutting,” in which individuals get rid of their cable programming and opt for local on-air television and Internet streaming services as an alternative to traditional cable TV.
As cable costs continue to rise, cable subscribers might have to shop around for the best prices, or wait for the legal system to work the problem out. Whatever the outcome, financial analysts will be watching the results closely, and cable subscribers will be watching their cable bill.