High cable prices are doing what Netflix alone can't

Rocketing pay-TV costs are making three-quarters of triple-play subscribers consider cutting the cord.

By Jason Notte Aug 7, 2013 9:26AM
Watching television (© Digital Vision Ltd./SuperStock)TV viewers aren't cutting the cord and ditching cable for an antenna and some online options in massive numbers, but they are doing it. Jacking up the price of cable programming will only make it happen faster.

Back in October, Advertising Age found that 42% of TV viewers reported watching more streamed content this year than last year. Eight percent did so because they were cutting back on cable, and 10% had canceled cable and satellite altogether, though a whopping 73% said they were streaming just to catch up on episodes of their favorite shows.

Now CNNMoney has shared a Macquarie Capital report that indicates 76% of so-called triple-play customers -- those paying for cable, Internet and wireless phone services -- would get rid of their pay-TV service if they had to save money. The remaining 24% were split evenly between dropping broadband Internet or wireless phone service.

Folks who currently pay for triple-play service need not wonder what circumstances would suddenly make them so cost-conscious. The prices of those triple-play services have jumped by about 6.3% each year for the past three years. By comparison, overall inflation rose by 2% in each of those years.

Altogether, the price hikes have increased the cost of triple play by 20%, or $46 per month, since 2010. The average bill for those services in the U.S. is now more than $273 per month, which Marcquarie Capital analysts call unsustainable.

So why does cable get singled out? Because it's usually the biggest part of that bill and its costs are constantly rising as content providers seek higher distribution fees. CBS (CBS) and Time Warner (TWC) are having a huge squabble over that issue right now, while companies including Dish Network (DISH), DirecTV (DTV), AMC (AMCX) and Viacom (VIA) have fought similar battles within the past year.

The problem for TV viewers is that online options including Netflix (NFLX), Amazon (AMZN) and Hulu have finite content, few new shows and almost no sports. They're not a viable point-for-point alternative, especially with popular networks including HBO limiting their streaming content to cable or satellite subscribers. But streaming is an alternative.

As more viewers use streaming services to catch up on the shows they missed on their favorite cable channels and become more accustomed to that delayed viewing pattern, the potential for cord cutting increases. That may only shift the fee fight from cable company offices to the Netflix negotiating table, but for now it's still a cheaper path than any of the cable providers are offering.

More on moneyNOW

Aug 7, 2013 12:14PM
The first company that allows me to pick and choose the TV channels I want, and to pay for only those channels along with movies, will get my business instantly. I watch about 20 channels  out of the hundreds available, and no network TV at all, so my bill would be lower than most but sufficient for me as long as a recording and/or On Demand system is included for those 20 channels and movies.

Why isn't this available now? Greed.....the bane of humanity.
Aug 7, 2013 11:32AM

Hah! Bozos and Morons! I got rid of all TV content in my house back in 2010, I caught my kid reading Hemingway instead of watching Miley Cyrus less than a year later......

Why should I pay some cable company to feed drivel, propaganda, and lies into my home?

Why should I pay some cable company to advertise to me?

If we want to watch a movie, we rent it or stream it, but Momma decides what the kids get to watch now, not ABC Family Channel, and certainly not Madison Avenue or Hollywood.

John Prine said it years ago:

Blow up your TV,

Throw away the Paper,

Move to the country and build you a home.

Aug 7, 2013 12:59PM
I remember when Cable didn't have commercials, Now I'm forced to watch commercials on a paid service. Keep raising the cost, you'll force Americans off the boob tube.
Aug 7, 2013 12:52PM

A few years ago I signed up for cable TV with Brighthouse and had 160 channels.  One Sunday morning I turned on the TV and found infomercials on 40 of those channels, or 25%.  I couldn't believe I was paying through the nose for the privilege of watching paid programming for the Shark vacuum and not a program on the Discovery Channel.


So, I canceled my cable TV service and switched to rabbit ears for over-the-air programming, and it was one of the best decisions I've made.  Sure, there are some infomercials on OTA channels, but you're not paying dearly for the privilege of watching them.


Cable TV should be metered like electricity.  Why should a family of four, that banks 200 hours of TV viewing a month, pay the same cable bill for a couple that banks only 50 hours of TV?  Once you're watching an infomercial, the meter should go backwards.


Think about cutting the cable cord and put that extra money, probably over $1,000 a year, towards credit card bills, or maybe make an extra principle payment on your mortgage.

Aug 7, 2013 1:02PM
If I could pick the channels I want instead of hundreds of "junk" channels, It would be worth the 97 dollars an month I'm paying for the "lowest cost " package. Cable used to be nice, now the content isn't worth the cost of electricity to turn the set on....
Aug 7, 2013 1:00PM
It isn't the prices that got me. It was the 200 channels of pure crap!  Discovery, learning, history,A&E,Scifi,Science, etc,etc. Once they quit being what they were called, cable wasn't worth it any more. 
Aug 7, 2013 11:11AM
I do miss cable. I'm sad that they crank the price up so high. I feel like I've dropped out of the mainstream of American life. If they raise internet costs I'll have to drop that too. Gas, electricity, mortgage, car insurance there are very few things I can readily choose to cut off. Well it's not really a choice is it?
Aug 7, 2013 12:51PM
stopped watching tv years ago.  getting better at guitar.
Aug 7, 2013 12:59PM
I dropped cable in 1997, and have done without any programming ever since.  It was painful at the time, but I kicked the TV habit.  Now the cable companies would have to pay me to watch their drivel.

Now, when I visit family, it seems weird that they all "visit" in front of the TV set.  I may as well not be there at all.  The reality shows are stupid.  The reruns I've already seen 15 years ago back when I had cable, and the commercials just suck the intelligence out of my head if I watch them for more than a half hour.

The best part about dropping cable is the money I've saved.  Back then, it was $80 a month.  I figure I've saved over $16,000 in cable fees since 1997.  And I've gotten my life back instead of wasting 2-4 hours of every day in front of the tube.  Since stuffing my face was a supporting habit of sitting in front of the tube, I'm pretty sure I would be at least a hundred pounds heavier if I still had cable.

Now, if I could just kick the internet habit . . .

Aug 7, 2013 12:58PM
Again, it's the same old complaint(s) I've had for  years regarding ANY AND ALL cable TV providers including Sattelite. We are paying huge amounts of money for TV yet we still have to sit through COMMERCIALS? I don't wnat every piece of  trash channel and the crap they are pushing yet I have to order multi package channels in order to get the few I want and at way more $$$ than if I could choose only what I want to subscribe and watch? Cable and sattelite companies better get on board with "choose and pay" for only what you want or they can suffer the loss of customers like every other business that refused to meet their customer demands in the name of greed. Imagine what change we could invoke if we ALL just unsubscribed for a year and told them where to put their programming.
Aug 7, 2013 12:54PM
I cancelled cable and land-line phone almost two years ago.  I was tired of the rip-off!!!!!!   I paid more for a land-line than my unlimited minutes cell phone!  Go figure that one!   DirectTV kept raising prices and I do NOT like sports and that's the majority of all channels!  A few months ago I received a special in the mail from DirectTV and I thought I might try it again, limiting the channel line-up.  They told me that since I was a previous customer I didn't 'qualify' for the special.  I told them 'thanks, but no thanks'.  I don't think I'll ever subscribe to cable again.  They charge way too much!!!   I enjoy netflix and watching programs on-line! 
Aug 7, 2013 1:07PM
My problem with cable and satilite TV is the fees we pay subsidize other channels that can't stand on their own.  I would love to pay for just what I want........I know NBC and CNN would have a cow because they would be gone.  I also don't want to pay for the Home Shopping Channel and all those assc channels selling goods. 
Aug 7, 2013 12:55PM
As a growing number of consumers decide cable and certainly satellite T.V. are way over priced and cancel, the greed factor will drive prices even higher. Someone will eventually come up with an affordable alternative. There is every incentive to be competitive in this market as millions are looking for more affordable options. 
Aug 7, 2013 1:03PM
I cut the cord in April and I'm doing mighty fine. Spending more quality time with family, getting more exercise and saving around $100 per month. Now, if I could only figure out a way to dump the cell phone and still maintain contact with clients.
Aug 7, 2013 12:54PM

A significant problem with cable imo is all the crap they make you pay for that I don't watch and will never watch.  Stop bundling and simply let me choose which channels I want.  Everything costs something and there are only about 15 channels out of the hundreds that I receive that I would actually pay for if I was given the option.  I have not been faced with having to make the decision to drop cable but I will admit that I do get irritated on principle by the cost.  My daughter has an antenna and streams Amazon prime and has no complaints.  If I ever had to make a decision to cut living expenses I would consider that option in a second. 

Aug 7, 2013 12:21PM
I got rid of cable once the digital conversion happened. I can get the major networks for free, not that there is anything to watch on them. And thanks to my Roku boxes, I can stream netflix or amazon prime to my tv. Any newer shows I can watch on my projectfreetv, usually an hour or two after they air.
Aug 7, 2013 1:01PM
Remember when TV was FREE! I too am tired of paying for Cable TV. I canceled my Land Line in 2008 but Cell Phone charges are getting higher too and the service is poor. Maybe I will go back to the old ways... Start writing letters and reading more books. The Book is always better than the movie anyway! If I just turned off Cable, Cell Phone and Internet I could save roughly $300.00 month. Then MAYBE  I could afford Health Insurance!!  "NOBAMA CARE"!!  x p
Really, who NEEDS cable? Stores sell complete seasons of your favorite show to watch at your own convenience. Books are still available-go read for a change! As soon as my two-year contract is up, I'm dumping DirecTV; saves me $80/mo and I can still get the show I want elsewhere! A la carte is the way to win consumers. Sports-pfff! Don't watch, don't care! And let's not even talk about Duck Dynasty...! Let the ones that want that crap pay for it!
Aug 7, 2013 12:47PM
Watch WHAT you want, not what New World Order wants us to. A reminder that Orwell predicted a two-way portal for "observation" which would suggest why going digital was so important at the start of Obama's first term. My personal library has good books and great movies.
Aug 7, 2013 1:10PM

Are people stupid or what? Why let the cable and or dish companies dictate what we watch lets boycott them all until we are able to get the channels we want A'Lacart and besides these companies are making millions not only from us but from selling time space for advertisement.

We the people can force the cable/dish companies to change just by boycotting there poor over priced services.

we could even force the lousy government to listen to us by doing the same thing. We the people need to start standing up to these pirates!

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