80% Of Cord Cutters Leave Because Of High Cable TV Prices, But The Industry Still Refuses To Compete On Price

from the it's-not-a-problem-if-we-ignore-it,-right? dept

A new study from Tivo (pdf) notes that nearly half of current pay TV subscribers are considering cutting the cord this year. That's not particularly surprising given the fact that the first quarter set cord cutting records, and the second quarter is expected to be significantly worse. Similarly unsurprising is the fact that of these defecting customers, roughly 80% of those departing say they're doing so because traditional cable TV service is simply too expensive:

37.1% of respondents spent at least $101 per month on cable TV, with some spending upwards of $150 per month, with trends only aiming higher. While cable providers often pay ample lip service to "providing value," the entire cable and broadcast sector continues to believe that it can simply refuse to compete on price with a growing roster of streaming competitors now arriving at the gates of their beloved cash cow.

Case in point is Charter Communications, which after a recent acquisition spree has been raising TV rates upwards of 40% despite the supposed bump in competition. Charter CEO Tom Rutledge, who was deemed to be the highest paid executive in the United States last year at $98 million, has insisted that these customers were simply "mispriced" under previous ownership and needed to be nudged in the "right direction" (read: paying even more money for the same service they already thought was too expensive):

"It’s a difficult thing to model. But we’re coming at it both ways, both from creating a value proposition in the pricing and packaging we have, and doing those smart things that you can do with an existing customer base that’s been mispriced to move them in the right direction."

That's gibberish, and shockingly, this kind of tone deafness to the overall trajectory of the cable sector is only causing a spike in cable TV defections at the company, which lost more than 100,000 cable TV subscribers last quarter. Tivo makes it clear that the cable industry can't continue the ongoing head-in-the-sand approach to dealing with the rise of cord cutting and streaming competition:

When the increase in monthly bills is coupled with the fact that 81.4% of unsatisfied respondents selected “Too expensive/increase fees for cable/satellite service,” it becomes evident that something must be done about this group. With more options than ever for TV in 2017, consumers continue to get smarter about their TV options, and many have discovered ways to access TV for far less than $100 a month. Skinny buddle offerings have increased, too, and options include Dish Networks’ SlingTV, DIRECTV NOW and Sony’s PlayStation Vue.

Instead of competing on price and package flexibility, most large cable companies (like Comcast) have responded to cord cutting by not only raising TV rates, but ramping up deployment of arbitrary and unnecessary broadband usage caps and "overage fees", allowing them to counter any lost TV revenues with broadband price hikes, and punish folks looking to wander away from Comcast's own TV walled garden. But Charter is prohibited from using caps for another six years as a condition of its recent megamerger, conditions the FCC has started to slowly but surely nibble away at.

Still, the cable industry has at least progressed in one meaningful metric: a few years ago it denied any of this was happening whatsoever.

Filed Under: cable, cable tv, competition, cord cutting, fees, high prices, tv

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  1. icon
    PaulT (profile), 20 Jun 2017 @ 4:45am

    Re: Re: Re: Re: Profitability changes as the market does

    "Hi Paul, nice to see you can't help but attack me personally."

    That was an attack? Don't like what I say to you, stop lying.

    " I am just pointing out that a serious price drop in a subscription model is rarely good for the bottom line"

    Neither are arbitrary price rises. More effective would be the changes to the packaging and other systems used by these companies which are both based in market realities from last century and reduce the value offered to customers who increasingly want bespoke choices.

    But, you won't address these kind of things that have actually been said be people here, because it interferes with your bullshit narrative.

    "They are beholden to their shareholders and are suppose to do what's best for the bottom line of the company."

    Supposed to, yes. But, because they have a short-term mindset and have refused to recognise fundamental changes to their marketplaces, this is not what's happening.

    "As for TOR, I don't use it"
    "whatever IP my ISP assigns to me to the TOR list"
    "the TOR blocker doesn't work on that"

    So, you still really don't understand the fundamentals of what you're complaining about? Or, are you so ignorant that you think that the IP list used by the spam filter here has something to do with Tor?

    The only reason why Tor is ever brought up here is because you (or one of your claimed doppelgangers) is whining that you can't use it to bypass the spam filter effectively. If you're not using it, why do you keep mentioning Tor? It has nothing to do with this site otherwise?

    "I did mention however that the method used by Techdirt to block me generally has been to just automatically add whatever IP my ISP assigns to me to the TOR list"

    Which isn't true. They send posts from IPs that have been flagged as spam or trolling by the community here to a spam filter, which is then manually moderated. You should find that your messages are filtered less while you have a login (as that typically means they won't be flagged as spam), but you still only have yourself to blame when your lies and trolling are still flagged as such by people tired of your shit.

    So, again, you've avoided actually answering the points raised by the article, and ended up on a self-important whining session attacking others on the site when called out as the liar you are.

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