What's Making Cable Rates Jump So High?

from the behind-the-scenes-fighting dept

Just what we need to see – a bunch of companies trying to charge each other more money, leading to consumers getting bigger bills all the time. There have been plenty of stories pointing out that cable TV rates seem to be going up noticeably on a yearly basis. Usually, the cable companies blame it on the cable channels charging them more to carry them – and the worst culprits appear to be the sports channels who know they can get away with charging higher and higher rates, because some fans simply can’t do without their ESPN. Of course, at some point, the whole mess simply becomes too expensive for too many people, and they start to look for alternatives. You would hope that competition would help drive the prices down, but since each of the various sports is basically a monopoly, they charge high rates for the programming, and the fans want access to that programming. The end result, though, could be that the casual fan gets driven out of the market – which is something all of the major sports will eventually regret.

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Comments on “What's Making Cable Rates Jump So High?”

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anonymous says:

Here is how cable pricing actually works

I did a project for a cable company. Many of the execs involved in the project can only be described as complete idiots.

Their existence was explained this way. Let’s say you are a mayor or power alderman in a city and you hava a child who is so stupid, McDonald’s won’t even hire them.

What do you do? You get them a job a the cable company. And what do you do when the cable company comes and says they need higher rates? You grant them the increase, no matter how bad the data is.

So, there is never any push back from cities, which means there is no push back from cable companies to cable channels.

Galley says:


Why anyone still uses cable TV these days is beyond me! I have been a DirecTV customer since 1997, and if anything, my rates have gone DOWN! DirecTV’s “Total Choice” package has had only one rate increase since 1994, and that was $2.00 per month. DirecTV offers Total Choice plus the family pack (an additional 10-12 channels) plus all of your local channels for $39.99 per month. The only extra fee you will pay is your local sales tax. There are never any hidden surprises on my bill.

Oliver Wendell Jones (profile) says:

Re: Satellite

Satellite is only cheap if:

1) You are happy watching all of your television in one room, as opposed to having a large family who needs access on 4 or more televisions. Satellite costs an additional $5 per receiver after the first, so 4 TVs automatically adds another $15 to your bill – not so for cable.

2) You aren’t using cable modem as your broadband provider. Use a cable modem and satellite for TV – you pay $50 per month for cable modem. Use cable modem and cable for your TV – you pay $40 per month.

Just those two things along save me $25 per month vs being with satellite.

When I had satellite (DishNetwork) with America’s Top 150 package on 4 TVs it was over $110 per month + $50 for cable modem.

By switching to digital cable television (with analog cable on the three bedroom TVs) my total cable bill is now $112 and that includes my cable modem.

The only drawback was that I lost the DVR capabilities of the primary satellite receiver, but my cable company is implenting DVR technology in ’04 so I hopefully won’t have to do without for too long.

Vince (profile) says:

Re: Satellite

And $2 per receiver. Even with thier great deals they are still more than cable. We looked at what we had a at home: 3 rooms, the ability to watch one channel and record another in 2 places. To get that with Dish I would need not 3 but 5 receivers. At $10/month ‘lease’ for the receivers the package gets more expensive than cable.

Johnny Satellite (user link) says:

Re: Re: Satellite

I think everyone should take a look at the prices again – In January of 2004, just as cable companies have increased rates again, satellite providers have made more receivers available that eliminate the “I can’t record a different station” problem – they’re dual-tuners.

Also, if you MUST have your cable modem, you’ll find that you already have basic cable throughout your house just by splitting off from your cable modem (for free!). Before believing the crap that cable companies spread, remember that you can research it yourself and find the truth.

Ever hear of Voom Satellite? That’s right – it’s a cable company’s new satellite offering. If they can’t beat us, I guess they’ll join us.

yatta (user link) says:

Interesting in the face of TVIP

Take a look at this article on TV over broadband in Hong Kong. You can order channels a la carte allowing the service provider to pass the costs along to only the consumer who wants it. It’s an interesting idea. There are other implications here for things like PEG channels and must-carry but it seems like this is where it’s all going.

Director Mitch (user link) says:

Re: Interesting in the face of TVIP

“A la carte” keeps getting brought up at the U.S. regulatory level as well, and if the sports networks and the like keep raising rates, I think consumers will get upset, which will make it interesting to the feds, and perhaps things will move that way. Ofcourse there will be plenty of $ thrown in by lobbiests to make sure that won’t happen. Will be an interesting fight.

I’m rooting for it since I don’t watch sports and only watch about 10 stations anyway, not including the premium channels which are al la carte already.

Jason says:

COX and ESPN have been going at it for a while

Cox has already tried this BS by trying to move ESPN to it’s premium line, and even launched a web site to justify it’s decision.
See: http://www.makethemplayfair.com/
But, ESPN fought back with their own website:
I really like the open letter to their fans:
Assuming half that stuff is true, I tend to believe the cable companies are just out to make a few more bucks, and are just trying to find a scapegoat to take the blame. Especially when DTV hasn’t gone up in ages, and the cable companies keep loosing customers to satellite.
I very seriously doubt the problem is with higher programming costs. It’s all just smoke and mirors.

Jimmy says:

Its all a monoploy and we are gettin screwed!

I have had cable, cable internet, dish network and direct tv and the best of them all, c-band..
C-band was by far the cheapest since you could choose any choice of channels or packages and program providers and had tons of free channels, but we all cant have an 8 foot dish in our yards…
Basic cable is 48.00..
Basic ‘digital cable’ is about 63.00..
‘Digital everything’ is about 93.00..
Cable internet 45.00..
Modem rental 3.00
Each additional cable box 6.95
My total bill 127.00
I have service interruptions that no one can resolve (7 techs in the past 10 months)
I only watch 63 of the channels and seldom use the ‘on demand’. I believe you should have the ability to choose what you want in your cable line up and pay for what you watch..
I know for fact that some of the ‘digital’ channels aren’t all digital and that they could save some subscribers rental fees on the extra cable boxes by adding channel modulators at the head end and putting some channels into the higher analog band since most ‘cable ready’ televisions have the ability to have over 125 channels..

I paid 45.00 for basic DirectTv but I didnt get locals or some of the channels I liked to watch because it was in a different ‘tier’ so therefore just for me to watch 1 channel I had to pay for others I didn’t watch or care for..

Dish Network basic 180 package with locals 55.00, seems fair to me cause I got what I wanted..

I figured with DirectTv and Dish Network now all I need is high speed internet.
Cable internet without video service is 55.00..
DSL through the phone company is 42.00 along with basic phone service at 30.00 which I don’t need a land line phone since I use a mobile.

As for reliability of all of the above, small dishes will go out in heavy rain or will tile or pixel up during moderate rain. Try using a larger dish if possible, when I had c-band I never lost signal and could still have a digital picture with very little tiling.. I have seen tiling and pixels with cable when a heavy storm comes through the area. If cable does go out its usually due to a head end issue or an actual break in the communication lines including power failure..

Any way you choose, whoever you choose, you still pay about the same every month or more.. Its all a monopoly because someone is getting rich off of us and we are paying more and more for something we aren’t getting but something we expect..

Be glad you have the choice you have now because some of you may have grown up having only 3 maybe 4 over the air channels and after midnight all the channels went off the air, thats scary to a child waking up at 1am..
I was lucky to have cable in the 80’s and to have 28 channels was pure bliss to a child back then..

Thanks for letting me vent..

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