For decades, cable providers have monopolized the television market and continued to increase prices with little competition. In the last five years alone, the cost of cable has increased by nearly 20%. As a result, customers are cutting the cord in record numbers and switching to streaming services like Netflix and Hulu as affordable alternatives. Cable providers have finally taken notice of this trend and have begun offering “bargain” packages with smaller channel bundles. Unfortunately, these new packages come with even higher costs per channel. For example, if your local cable company charges you $60 for their standard package which includes around 150 channels, their new “Economics” package will only cost you $40 but only include around 35 channels. In this blog post, we’ll discuss why cable can be so expensive and what you can do about it as an alternative to cut the cord on your cable bill forever!
Why is Cable So Expensive?
There are many factors that affect the price of cable TV. First, there is the cost of the content that is being aired on the channels. The more popular a channel is, the more expensive it will be to produce. Second, there is the cost of programming agreements.
What Is The Reason Cable So Expensive?
1. Cost Of Programming:
Cable providers are required to pay expensive rights fees to the networks that air their programming. As a result, cable providers have to charge a premium for the programming that they offer. The more popular the channel, the higher the cost. For example, Discovery Channel is about as popular as HGTV, and DIY Network is just as popular as Food Network and Cooking Channel. So, it would be easy for cable providers to offer these channels for about $10 per month each. However, in order to make more money, their prices are higher than this amount at around $50 per month (depending on your location).
2. Content Costs:
The content costs of cable TV are also increasing but at an even faster rate than programming agreements. The reason why these costs are increasing is that there are more competitors in the industry who want to air their own content which causes an increase in competition which causes an increase in costs.
3. Costs Of Running Cable
More original programming is being made and aired on cable television, but the costs of producing this content are going up as well. In order to get a good deal on content, cable providers have to buy more from the networks as well. As a result, the cost of programming for cable providers has increased by 50% in the last 5 years.
4. Programming Agreements:
Cable companies have to pay a lot of money to produce their own programming. For example, ESPN costs about $7 per subscriber per month (around $65 million). This is why there is such an increase in the price of cable TV lately. In order to make money, cable companies need to charge more for their programming so they can afford to buy high-quality content at a reasonable price.
5 Cable Bill:
Cable bills also increase each year due to these factors mentioned above and other factors that affect billing and customer service such as equipment charges and late fees charged by your provider. Since cable providers have to pay more for their programming than other traditional television services, they have to charge more for their content. For example, HBO has a lot of popular shows like Game of Thrones that are very expensive to produce. In order to make up for the cost of producing these shows, cable providers have to charge a premium for them.
6. Cable Regulation:
The Federal Communications Commission (FCC) has imposed new regulations on cable companies that require them to increase their fees in order to cover the costs of government fines and license fees (e.g., a $1 billion fine levied against Comcast in 2015).
A Brief History Of Cable Pricing
- Cable prices were regulated from the beginning. The first cable regulations were put in place by the Federal Communications Commission (FCC) in 1938. The FCC limited the amount of money that a cable system could charge to deliver a channel to a subscriber. This was done to prevent monopolies and promote competition in the industry.
- In 1979, Congress passed legislation that allowed cable companies to negotiate their own pricing with their customers for programming channels that they delivered over cable systems on behalf of other companies. These channels included local broadcast stations and public, educational, and government access channels such as PBS and NPR. Prior to this change, many providers had only been able to charge one rate for all programming services they provided through their cable systems. In addition, it introduced new concepts such as ‘basic’ channels that were offered at no extra cost to subscribers who wanted more than just basic programming (these channels were later sold either individually or as part of ‘basic package’ packages).
- In 1984, Congress passed the Cable Television Consumer Protection and Competition Act, which gave cable operators the right to establish their own rates for services they provided over their cable systems.
- In 1985, Congress passed legislation that allowed cable operators to negotiate their own rates for interactive services such as video games and video-on-demand (VOD) services.
- In 1995, Congress passed legislation that allowed cable operators to establish their own rates for pay-per-view (PPV) programming on television sets and other set-top boxes such as TiVo.
- In 1997, Congress passed legislation that allowed cable operators to establish their own prices for video games and other interactive services delivered through set-top boxes such as TiVo.
How To Save Money On Your Cable Bill
1. Call And Haggle
Call your cable provider and ask for a better deal. You’d be surprised how many people don’t do this! You may have a friend who got a great deal but doesn’t know why. You can call and try to get the same deal. If you don’t get a lower price, you’ll at least know why. You can also try calling and threatening to cancel your service if you don’t get a better deal. You might be surprised by how quickly they’ll cave! This can also work with internet providers.
2. Cut The Cord
This method comes with a bit of hidden risk. You’re basically taking yourself off of your cable provider’s network. You’ll need to find a new way to get your shows. There are a few different ways to do this, though. The first is an over-the-air antenna. This will let you pick up a lot of the major networks for free. You can also use a streaming service to get your shows. There are a bunch of different services out there. You can choose one based on what shows you want to see or even which devices you want to use.
3. Bundle And Save
If you’re a fan of certain shows and use streaming services to watch them, you can bundle these services with your cable provider to get a lower price. There are some streaming services that will let you watch on your TV. If you’re not a fan of what they offer, you can bundle your cable with a streaming service to get a lower price. This will give you the best of both worlds. The key is to make sure to find out exactly what you’re paying for so you know how much you’re saving.
4. Dvd Rentals
This old-school service is still around for a reason. You can get a DVD rental for as little as $4 per month. You can also rent digital copies of movies from services like Amazon or iTunes. Depending on the service, you can sometimes get new releases for 10-20% less than what it would cost to buy the DVD. If you’re a movie buff, this could really save you a lot of money.
5. Watch What You Eat
Are you a fan of sports? Sports events can be very high in cable costs. You can ask your cable provider if they have a sports pass. This will let you pick which sports you want to watch. This can cut your costs in half compared to paying to watch every game. You can also look at what sports are offered on streaming services. Sometimes, you’ll be able to watch the game for less than what it would cost to pay for a channel that shows the game.
6. Try A Streaming Service
Streaming services are getting better and better every year. If you’re not a fan of what cable companies offer, you can try a streaming service like Netflix or Amazon Prime. These services are great, especially if you want to watch shows when they originally air or catch up on your favorite shows. There are some streaming services that are starting to produce their own original content. This can save you money on cable in the long run.
Conclusion
Cable providers have been able to monopolize the television landscape for decades thanks to their stronghold on wired television. Unfortunately, their continued increase in subscription costs has driven customers away in record numbers. This is particularly true among younger generations who have grown up with the internet as their primary source of video entertainment. Cable providers have finally begun to notice this trend and have begun offering smaller channel bundles at a lower cost per channel. Unfortunately, these new bundles come with even higher subscription costs, making them an expensive alternative to cutting the cord on cable.
