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As cable TV slowly slouches toward the grave, providers are wringing every last dime they can from Americans. New market research shows that the cost of paying for TV has risen by 50 percent since 2010.
Leichtman Research Group published a new report on Wednesday based on a survey of 1,152 households around the United States. It found that the mean American household is paying about $107 every month for some form of pay-TV services like cable or satellite. That’s a big jump from its 2010 finding of an average monthly cable bill of $71.24. In 2010, research firm Centris found in its own study that the average cable bill was $75 each month and projected that it would rise five percent each year. The good news is that pace has slowed a bit in the last year and the average spend only went up by 1 percent. The bad news is we’re spending more than $100 every month for frickin’ TV.
According to LRG, about 78 percent of households with a television are paying for TV in some way. That’s down nine percent from 2008. It found that younger consumers were less likely to pay for cable and 32 percent of respondents who’d moved in the last year have not activated a pay-TV service. Tracking people who have moved could indicate that there are many more subscribers that might cut the cord if faced with the decision of re-subscribing.
The researchers found that the top pay-TV providers that make up 95 percent of the market lost 415,000 video subscribers in the second quarter of 2018. The top six cable companies’ subscriber counts dropped across the board. In contrast, cheaper streaming bundles from Sling TV and DirectTV Now added 383,000 subscribers.
In other news on cable companies, the Los Angeles Times tried its damnedest to find out how much the cable boxes that are rented on a monthly basis to subscribers actually cost cable companies to purchase. Next month, Spectrum TV will raise its monthly rate for a set-top box to $7.50 from $6.99. Predictably, Spectrum did not want to say how much it pays for the boxes, and neither did Arris International, the world’s largest supplier of set-top boxes. Charter, DirecTV, Cox Communications, and Comcast all declined to reveal their own cable box costs. Finally, some Wall Street analysts that track Arris told the Times that they would estimate the boxes go for “$150 apiece and more advanced boxes for closer to $250.”
Why are all these prices going up at a time when the pay-TV industry faces stiff competition from dedicated streaming services like Netflix and skinny bundles from Sling? Shouldn’t competition be driving prices down? It’s a great question. For the moment, providers seem to be content making up for losses by penalizing the customers who stick around.
[LRG via Streaming Observer]
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