Cord Cutting Is The Obvious Result Of A 70% Spike In Cable TV Prices Since 2000

from the duh dept

We’ve discussed time and time again how, when faced with an evolving video market, the broadcast and cable industry repeatedly decided to double down on bad ideas. While consumers increasingly lamented having to pay $130 per month for a massive channel bundles filled with sub-par content, the industry refused to offer serious a la carte options and then jacked up prices even further. When consumers began to complain about high costs and annoying ads, cable and broadcast executives responded by trying to stuff more ads into every viewing hour by speeding up or editing down programs.

So for anybody paying attention, the fact that cord cutting is expected to set records in 2018 shouldn’t be particularly surprising. And it’s equally unsurprising that a recent study by Kagan highlights how soaring cable TV prices are contributing to the cord cutting trend. The firm was quick to note how the average cable bill has increased in price by 74% since 2000, even adjusted for inflation. All while the average income saw either tepid growth or remained flat, as this Kagan chart highlights:

The firm noted how prices for multichannel packages have steadily risen from just below $60 a month in 2000 to close to $100 in the peak year of 2016, and that’s not including the added costs these companies hide below the line via obnoxious hidden fees. Or the fact that most cable companies now charge you for everything from modem rental to the honor of being able to pay your bill in person or over the phone, resulting in compounded annual gross revenue for cable, satellite and telco pay TV platforms increasing at at a rate of 5.5% every year from 2000 to 2017.

It’s only now that streaming has begun to reach critical mass that some cable giants have actually buckled to the call for cheaper, better options (AT&T’s DirecTV Now, Dish’s Sling TV). But there’s still countless cable operators soldiering forth with rate hikes and a refusal to improve historically awful customer service — as if the traditional cable TV cash cow is going to live forever. Many industry execs still honestly see cord cutting as a trend that will magically end once Millennials come to their senses, which is a painful misreading of the scenario.

Part of this confidence is because they have a fairly obnoxious plan b. Given the cable industry’s growing monopoly over broadband, most of these companies will simply counter these losses with even bigger price hikes for broadband. Most of those are going to come in the form of arbitrary and unnecessary usage caps and overage fees. These are just glorified rate hikes on uncompetitive markets, but they have the added benefit of making it more expensive to stream for those looking to escape the stranglehold of their traditional cable provider.

And with the looming death of net neutrality, there will soon be an ocean of new “creative” tricks these companies will use to ensure that you remain tightly constrained inside their own massive media landscapes (be that Comcast NBC Universal, or AT&T Time Warner), and punished should you actually try to wander into greener, cheaper pastures.

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Comments on “Cord Cutting Is The Obvious Result Of A 70% Spike In Cable TV Prices Since 2000”

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wajawe says:

Re: ?

your cryptic comment is meaningless even to those who see quite well

– cartels can not raise prices continuously; higher prices always reduce buyer demand, with many factors affecting the specific market

– cord-cutting is a predictable, rational consumer response to high prices

– personal cable service (and cell phone service) is ultimately a luxury expense, not a necessity; plenty of room to economize by consumers.

– Taxes on cable & phones are also at extortion levels … what is the government giving you in return ?

– Are you happy with current results of local/state/federal regulation of your telecommunications markets ?

Anonymous Coward says:

I was happy when ATT Uverse came to town.

“Was” being the key word for today.

Got the U300 package and was under $60 dollars a month. No cable box rental fee, no remote fee .. nothing extra. Just the cost of the service and sales tax. I was ecstatic!! Suck it corp cable nerds.

Then they started pulling out the good channels .. then $10.00 a month for HD and before for I knew it I had high priced crap again.


Right now I am OTA and have been for quite some time. Don’t see any reason to go back.

Suck it corp cable nerds.

Anonymous Anonymous Coward (profile) says:

Are we sure it isn't the other way around?

Given the precepts of ‘felony interference of a business model’ is it possible that the rate hikes are due to the cutting of cords? I mean, those businesses attained a certain level of profit, not per customer, but total profit. Now they feel they deserve to not just maintain that profit, but to increase it, year after year, despite any business conditions.

So the number of customers decrease therefore new charges that don’t actually pay for anything new are required to maintain profit levels. In that way, those felons who cut their cord are ameliorated by charging the remaining customers more, and more, and more. Problem solved.

Except that neither way is actually sustainable.

Anonymous Coward says:

Re: Are we sure it isn't the other way around?

Yes and no, and its definitively a factor, but it start by how the accounting works nowadays centering in sort term profits and grow. Basically if you rank up price you are going to lose always some customers, some of those customers tend to return in medium to long term (6 months to 2 years) and specially before events (Superbowl as example), now as the companies want always bigger profits in the sort term they rank up the prices faster that one that let time for customer rehousing.

MDT (profile) says:

Re: Cutting the Cord

We recently cut our cords :

What we originally had :
1) Dish + 3 Receivers (2 HD, 1 SD)
2) Dish All America : $136 / month with all fees and rentals
3) HULU (12.50 / month)
4) Netflix (14.00 / month)
5) Amazon Prime (100 / year)
6) AT&T U-Verse Internet Only (30.00 / month)
Total Per Month : ~$200.00

What we wanted to do :
Go to Dish Hopper 3

What they wanted me to do :
Pay them $100 fee to upgrade to Hopper 3, for the privelege of paying them another $10 a month for the saem we had plus Hopper 3.

What I did :
Got mad, started looking into cord cutting.

What we have now :
1) Four ROKU receivers (2 Ultras, 2 Roku Express Plus)
2) Sling TV Orange (25.00 / month)
3) CBS All Access (10.00 / month)
4) Netflix (14.00 / month)
5) Amazon Prime (99.00 / year)
6) AT&T U-Verse Unlimited Internet only (60.00 / month)
New Rate : ~$120 per month

So we reduced our bills by $80 per month. Really, I hesitate to include the $8 per month for Amazon as we mostly use it for buying things, not video. We dropped HULU because they TOTALLY hosed up the user interface and turned it into a steaming pile of horse droppings. Then they said they were proud that their interface was difficult to use because ‘our younger subscribers prefer a non-intuitive interface’.

Anyway, to reduce your costs, I’d suggest going with ROKU + Sling TV and you’ll get most of a basic cable package, and either use over the air for local channels, or add on CBS all Access. You’ll get NBC on demand in Sling with a $5 add on. ABC you wont’ get unfortunately, they mostly go to HULU and HULU is awful now.

Anonymous Coward says:

Re: Re:

Nah, that won’t work. The predetermined conclusion is “higher rates,” and they make up post-hoc justifications for those rates.

Customers complaining and cord-cutting? They need to get the same amount of income out of fewer people: jack the rates up.

Customers not complaining, or happy with the rates they’re getting? Great, that means there’s room to jack up rates.

More competition? That means they need to invest in infrastructure to compete, and so they need to raise rates.

Less competition? This means that there’s nothing to push rates down, so they can raise rates.

Etc., etc..

If you’re looking at the justification for raising the rates, you’re playing the cup-and-ball game that the companies want you to play. The ball is, and always has been, in the magician’s sleeve, not under any of the cups. Rates are going to go up, no matter which cup you choose, and the only reason they pretend otherwise is to grant you the illusion that you can win, so that you will hand over your money and play their rigged game.

Rolando Escamilla says:

Cutting the cord

It is about time that consumers are lashing back to this abusive cable companies, their greed has to stop and the way to do it is to make more and more consumers aware of these abuses and make them public .I since I cut the cord and having internet service and streaming capabilities I’m saving about $80.00 monthly, tks to a rep. Of one of the big electronics retailer advice.

Anonymous Coward says:

market shifts, abandoning elastic toward the inelastic

Maybe we can compare the price effect of cable vs cordcutting to the history of gasoline, full-serve vs. self-serve ……

Originally, all gas stations were full serve. When the international trade sactions hit America in 1973 and the wholesale price shot up several-fold, cheaper self-serve gas stations emerged, and eventually became dominant. At first they tried to compete with them on price by cutting expenses and bearing smaller profit margins. But as the population became accustomed to pumping their own gas, full-serve stations went in the other direction, becoming increasingly expensive in the following decades, until the few remaining full-serve gas stations were exorbitantly priced compared to self-serve. So, in the end they had completing given up competing and were obviously targing a much smaller but price-blind market. (but then that story, compiled from several not always reliable sources, might be more or less accurate as an early morning Trump Twitter anecdote after a night out at the mens club or whatever.)

Anonymous Coward says:


When I had Spectrum my bill was low at first then after the first two months my bill spiked up to $300 and then the fourth money was about 5 to $600 and I ask them why my bill was so high and their response was a whole lot of bulshit so, I ask them to turn it off and I had basic cable afterwards for the rest of the year until they came and cut that as well

Anonymous Coward says:

Cord never and staying that way.

I guess I’m what you would call a cord never. I’ve seen the same thing time after time, more channels than I knew existed. A couple of years, while visiting family, I recall sifting through the channel guide, ‘trying’ to find something interesting to watch from hundreds of channels. After wasting thirty minutes, I realized there was just so much bloat. Who needed a clunky outdated interface from a box you had to pay to use. Consequently I loss all interest, and decided to boot up my tablet.

Fast forward to today. I have WOW as an isp and Vue at the core tier with hbo.

I no longer have to spend time trying to find what I want, or get lost in dozen upon dozens of channels. This is helped in that it has a sort of intuitiveness that reminds you of of netflix or hulu. It nice that I get helpful recommendations when I look up the info on a show, instead of being barraged with ‘look at me’ ads.

And then there’s the go anywhere app access. If you subscribe to hbo via ps vue, you get access to it’s app, just like you would with many of the channels on vue’s lineup

That One Guy (profile) says:

Re: Liar or liar, which are you?

So either this is the real Richard, in which case they were lying through their teeth when they claimed they didn’t comment signed out(in the same thread that they posted a comment signed out of course) and they deserve to be flagged for that reason, or it’s just someone using their name, in which case they deserve be be flagged for that.

Flag and ignore either way.

Jinxed (profile) says:

I don’t agree with the chart’s assessment cord cutting is responsible for increased rates.

I blame the distributors, who constantly force cable companies more money to charge for shows, including forcing them into “bundles” of channels owned by the same distributor.

These “blackouts” have been just as frequent over the span of 18 years.

Cord cutting has an impact, for sure, but when people are forced to pay $8/mo for ESPN, and this is one channel we’re aware of, it makes you wonder how many other “monthly fees” we’re paying for other channels.

Cable needs shows to be viable. Without them, what’s the point of cable?

Distributors figured this out a long time ago.

This is why cable companies started allowing ads to be injected into broadcasts.

I’m not defending cable companies here, but to ignore the 1.2 trillion ton elephant in the room is ridiculous.

Just as an FYI to support this: notice how many of these distributors are now pulling from places like Hulu and Netflix to push their own monthly service site.

Eventually, distributors behind television shows will become obsolete. There won’t be a platform to stream on, and those platforms whose bridges they’re burning now are creating their own content, bucking the trend of old school TV.

Can’t come soon enough, frankly. Just how many CSI shows does a station need, anyway.

Brandon Hann (profile) says:

Re: Re:

My favorite is the “Regional Sports Fee.” I was getting this small fee (about $5 years ago) on my bill and when I finally noticed, I called to ask what it was since I didn’t subscribe to any special sports bundles or anything. I was told that if any one of my channel lineups has sports programming, then I would have to pay the fee. It ended up being one of the basic sports channels or something. So I asked what the fee was for and they told me that it was used to subsidize the extra costs that the major leagues were charging for broadcast rights! I explained that I never watch sports, but the only fix was to remove the plan that had sports channels in it. So I cancelled the whole thing and never looked back.

They tried to save me as a customer, but I explained that I didn’t feel like subsidizing the cost of sports programming when I never watched any of it. I’ll admit there was a brief time when I missed cable tv, but it only took a couple months before I was finding other things to occupy my time.

Anonymous Coward says:

"Average income"

The firm was quick to note how the average cable bill has increased in price by 74% since 2000, even adjusted for inflation. All while the average income saw either tepid growth or remained flat, as this Kagan chart highlights:

The explanation doesn’t make sense. The price increased by 74% since 2000—not while growth remained flat, but until it became flat (2017). Note that the graph shows the average monthly income per subscriber (ARPU = average revenue per user), and cord-cutting could well increase that number if internet subscribers aren’t included in that measure (do they count as "telco"?).

Anonymous Coward says:

Re: "Average income"

Average inflation adjusted income levels in the middle to low income brackets have not increased since the Reagan tax “reform” of the 1980’s. It has been argued that they have decreased.

Perhaps there will be more failed businesses as a result of the greed that seems to be so prevalent.

Anonymous Coward says:

Re: Re: Re:

When he says “copyright costs” he really means sports fees. A big chunk of the rate increases has been to pay for the increased cost of sports broadcasting. Disney will charge $6 per month just for a single ESPN channel. And then there are the regional sports networks which add even more cost.

Netflix, HULU, and Amazon do not have any live sports so they do not have to pay this fee which is why they are so much cheaper.

Even for some of the other skinny streaming bundles, they usually do not include any of the cable channels that show a lot of sports.

JohnnieG says:

People need to unite and bite the bullet. They work for us.

There are options, it may be a little harder but when cable executives don’t care if you live or die but want to fill their already deep pockets and deprive the average working American with pay or drop dead we need to send a unitified may be a learning curve but there’s companies, co-ops and other avenues we can take. Like antenna TV and smaller internet providers. Streaming, Red Box for a movie, take up other activities. Don’t be bullied. Fight back. Take a year brake and watch pricing and services dive to acceptable rates. They are just greedy top heave millionaires who want more for themselves and less for your family.

That One Guy (profile) says:

Re: "Oh you don't want A and B, just B? Look at that, B costs more."

Part of this confidence is because they have a fairly obnoxious plan b. Given the cable industry’s growing monopoly over broadband, most of these companies will simply counter these losses with even bigger price hikes for broadband.

That was covered in the article, they feel safe in repeatedly cranking up the prices because even if people ditch cable and move to internet, odds are good the same company is the one they’re getting internet from, and with caps they can punish people trying to ditch their cable offerings by making them pay for the ‘privilege’.

Ditching cable is easy, and more and more people are doing it. Ditching the internet is another thing entirely.

:Lobo Santo (profile) says:

The blunder

If I ever accidentally manage to win one of those mega-jackpots, I’m going to start a new hobby of making companies that charge reasonable fees for service, just so I can fooking eat the lunch of companies that do this shyte.

Even if the stupid overcharging assholes match prices with me for a time (until I can be gotten rid of), there will at least be a fair price for a while.

Ruger1 says:

Rectom Cable.. I mean Spectrum Cable

I’ve had Brighthouse Cable for more than 20yrs,and Then Spectrum Cable which is I believe is Charter Cable and They SUCK!!! I had with Brighthouse Cable TV, High Speed Internet and Home phone ans Two HD DVR’s for $97.00 with Taxes Included. And then Spectrum Cable took over and said My New Bill would be $285 for the same Bundled Package I had with Brighthouse, Oh Hells too the No!!! I cut off the Home Phone, gave back the Two DVR’s and had to get Their Little Convertor Boxes, So Now with Basic HD TV Service and NOT So High Speed Internet My Bill is at $186..WTF!!! SOOOOO Know I’m looking to Sever the Ford and Spectrum can Shove It!!! Got Hulu, Amazon Prime, Netflix and having a 150 mile OTA Antenna installed!!!!

Anonymous Coward says:

Re: Re:

If the ISPs get the regulations that they want, you Internet data cap will be tied in to the level of cable package that you buy, or maybe the streaming services will be packaged in with cable bundles. The push against net neutrality is all about getting those cable subscriptions back.

anonymous me says:

Early Onset Cable Cord Cutting

It often comes as a surprise to me that I’m old. Apparently I’m of the generation that is keeping MSM alive for now. But I wouldn’t know; I cut the cable cord long ago.

When I moved house way back when, a cable salesman came to the door to tell me the previous owner’s cable hook up was about to be terminated and that he had come to sign me up for mine. I turned down his offer, politely telling him I hadn’t noticed that the house had cable; I did not want cable; I did not have a tv. Judging by his reaction, this was literally unbelievable. He warned me that soon I wouldn’t have free cable anymore because it really was about to be disconnected, and it would just cost me extra to get reconnected later. I hope he hasn’t been waiting. More than 35 years later I still haven’t called.

Like many others, I go you-know-where for news these days.

I guess not wanting cable is believable now.

Mike says:

Cut the cord and never going back

Went from over $150/month bill with Brighthouse/Spectrum, down to about $100 a month for both Internet (still with Brighthouse/Spectrum) and DirecTV Now. Additionally, I bought an internal HD Antenna and hooked up an HDHomeRun box so I can watch Live local channels and do DVR recording (use Plex with Lifetime Subscription for DVR functionality). It’s not a great amount of savings, but I get pretty much everything I had for about 50 dollars less each month.

ECA (profile) says:

Long ago, far far away..

$20 was enough to get all the basics, about 50 channels..Then you added to it..
You cant get Under $50 for BASIC NOW..and it includes MORE GARBAGE CHANNELS…
I would rather $20 and get the channels I wanted..5-20 channels..
WHy do you need 200+ Channels, that you DONT WATCH..

But its strange HOW those other channels get selected over Other channels..
If I cut the ones I dont want or need…and TRY to find the ones I cant.
Cut: religion, NEWS, RADIO, Music, PPV, Mexican and other Foreign, language, Sports…you have CUT Over 70% of the channels..
There are better sports then ESPN..and CHEAPER..

Anyone thats Swapped to Local broadcasts may have found some REAL interesting stuff…AND ITS FREE

Dank710 (profile) says:

TV is not worth paying for. Simply put. Most shows are used to push products and mainstream culture narratives. Why should we pay money to watch PROGRAMMING? If you want to program my mind with video that is fine. I will not pay for it. Lots of ppl have woke up to this. The entertainment industry is a racket and the average american should not waste their hard earned money supporting it. They get PLENTY of support from other places.



Re: Just pay for what you use.

At this point it makes far more sense to just pay for the content you want at whatever price they want to sell it at. This could be PPV streaming with Amazon or iTunes or it could be DVDs.

The idea that we were subsidizing crap like Duck Dynasty is what pushed us to cut the cord.

I also realized how few channels we actually watched and that some channels were only good for a single show.

OkieLad (profile) says:

The most compelling argument for cutting is simply the quality of content. Everything is now a low-budget “reality” show. “Awesome, a show about elaborate tree houses!” And you then tune in to see the same reality formula used for all other shows. If the content was any good, nobody would be debating the value or costs.

We cut the cord when our Cox contract expired. I called and said I would like one of the bundle deals advertised online. I was told “those deals are only for new customers” to which I replied “give me that deal or I walk…there’s no installation costs involved with giving me that deal vs a new client”. She refused. I said “I’ll just cancel my account and then call tomorrow to get that bundle”. She said with a laugh “that’s not how this works”. So, I cancelled and got my internet from the only other competitor in my area. I now get weekly postcards offering that $120 bundle deal to me. No thank you. We’ve come to learn that cable isn’t a necessity. In fact, it’s not even a luxury I am willing to pay for at any cost. I don’t need 140 channels of reality shows to pass the time.

Pj says:

I don’t watch much tv, so I haven’t seen the point of paying for any sort of subscription. I’m quite content with ota and occasionally buying a series on dvd. I would actually appreciate a cheaper internet plan that restricted streaming tv. Why pay for streaming capability that I don’t need? I’m interested to see what happens when cable tv collapses, especially with net neutrality rules gone. I’m fairly optimistic that something good will come of it, at least from the perspective of someone who places very little burden on the current infrastructure.

Anonymous Coward says:

Re: Re:

What does “streaming capability” mean? Because that’s called basic internet access. If you have internet access, you have streaming capability, along with any other capability. Restricting is just artificially limiting what is available by default.

The internet and networks don’t care what travels over the wires, it’s all electricity and zeroes and ones, there is no distinction between streaming video and your favorite social media.

Cable is awful says:

It's not the price... At all

The price of cable has absolutely zero to do with why I and many others don’t have cable. When a 30 minute show has over 12 minutes of commercials, it doesn’t feel like you are watching TV for entertainment but rather to be advertised to. The only time I watch live network tv is for sports and it is excruciating to sit through the mass of commercials.

Hell, internet alone could cost double the cable/internet bundle and I still wouldn’t pay for cable.

Larry Sawallish says:

I cut the cord

I had Comcast. They kept raising my fees and adding fees until I I could tolerate it no more. Fortunately we had a local cooperative installing fiber in our neighborhood. I subscribed for a flat fee of $69 per month. I installed antennas, subscribed to sling and Hulu. My total fees just over $100 and on Hulu I have no advertising. I will never go back.

Bye bye satellite says:

High satellite prices

I bought the Directv satellite syatem when you could buy it at Walmart.My payment was $30+ a month for almost all channels. I watched it go up but unless you live in town,which we don’t, that was the only option at the time.
I tried to keep my bill under $100 a month but was unable to for a long time. When I waa cut off in January, that made me look into streaming.
I currently have Sling but I am going to try several IPTV services to see which I like best.
I miss some of the channels that I don’t get but with Roku, I can always find something to watch.
The cable/satellite companies are pricing theirselves out of business. Some claim they are not making money but when you charge $10 per month, per receiver for HD when you can get many stations over an antenna on HD, it is ridiculous to charge customers for something that is otherwise free. To say they aren’t making a profit is a straight up lie.

Gadgetguy (profile) says:

We must ALSO boycott cable co's internet

Cable companies like Comcast got monopolies and then reneged on their promises to invest in infrastructure. Now they have bought politicians to kill net neutrality and allow them to control content too (ie. Comcast+NBC). They are counting on their leverage as Internet providers to strangle their cord-cutting users. We have a duty to push back by selecting internet providers that do not have any perverse incentives like these, even if their pricing is the same or a little more.

Jason Hemsworth says:

Cut the Cord

Cable will retire soon, I mean next 2 years. Why take my word for it, you ask? I worked for a cable company for around a decade. Why take my word for it? Let me share my résumé. Just kidding, that would be silly. Right?!

Look around for the alternatives, there are plenty and much better. Take DVR, for instance, I’ve got kids and they get to watch their favorite cartoons without crying for it. Get on to Netflix, Hulu, Fibo and countless other options without disrupting your schedule. There are a lot of providers around the US offering bundle deals that include solutions for cable, internet and phone, here one website where you can compare the deals and see what suits you –

I’ve had the best experience with Spectrum, in terms of prices and overall services. I went for Spectrum Select Triple Play last year, and no complains yet.

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