Will cable TV ever get cheaper?
With so many people cutting the cord, you'd think cable TV would now cost less, not more. But experts say that's not likely.
This post comes from Quentin Fottrell at partner site SmartMoney.
The Justice Department is conducting a wide-ranging antitrust probe into whether cable companies collude to restrict competition from online video providers like Netflix, The Wall Street Journal reports. At issue: Cable companies want to cap data downloads among heavy users, which would affect those who've abandoned pay TV in favor of streaming shows and movies over the Internet.
Though more people have "cut the cord" in recent years, analysts say it hasn't resulted in the price cuts many expected. "Cable prices won't go down unless cable investors get hurt, and that will only happen when even more customers cancel their cable," says technology analyst Jeff Kagan.
Some 9% of homes with televisions cut their cable services in 2011, while an additional 11% said they planned to do so, a survey released by Deloitte earlier this year found. (Post continues below.)
But despite this, cable prices doubled over the past decade, Kagan says. Customers have been complaining about price increases for years, he adds. "This is backwards compared to other technologies, but cable television pricing continues to go up," he says.
And prices may double again in the next decade. Keith Nissen, research director at NPD Group, predicts bills will hit $200 a month by 2020 -- up from the current average of $86.
In light of the Justice Department's investigation, cable companies may look for other ways to maintain their revenue and market share, experts say. One option: Do what cellular networks are doing and move toward usage-based pricing for broadband Internet, says Craig Moffett, senior analyst at Bernstein Research.
The shift to usage-based pricing would be good for the cable operators, but bad for consumers who want to watch more on-demand television online, he says. This would also slow the pace of innovation within the industry, he says, and make it more difficult for Apple or Google TVs to get widespread and cost-effective access to cable video feeds.
TV and cable networks also have no interest in lower prices, experts say. "The companies are caught in the middle and have to pay more year after year to networks," says Kagan. (Netflix, Time Warner and Comcast did not respond to requests for comment.)
Cable companies have also responded to the competition with their own new tech offerings, such as apps that allow viewers to watch TV on multiple devices and video-on-demand, says Brian Dietz, a spokesman for the National Cable & Telecommunications Association.
Google and Apple -- which both have streaming video offerings -- may be in the best position to upset the status quo. "These two companies changed the wireless space," Kagan says. "Perhaps they can change the television space as well."
More on SmartMoney and MSN Money:
I'm in my 70's and remember when 'cable' started, it was called 'Pay TV' then and the whole concept behind it was with the consumer paying a fee, the service was commercial free... that's what I said folks... there were NO COMMERCIALS when 'Pay TV' started out. Consumers bought into it because the 'free' channels had so many commercials, but like all good things that must come to an end, the money grubbers got there hands on it and the rest is history.... The moral of the story is no matter who comes up with a commercial free anything, don't believe it and if you do. I happen to know of a bridge for sale in Brooklyn.. LOL
Of the many scams which nobody seems to be aware of, like the absurd cost of prescription glasses, cable has to be among the top.
I have TV Antenna and get all major networks for FREE!! People should just get back to basics and tell the cable companies to well take a long walk off a short peir.
They are robing you blind when you think what you can buy with 80-100.00 a month. 1,200.00 a year!!
They are keeping you poor, by your choice. Food for thought.
"Until we get the option of a la carte pricing, and can pick the channels we want, nothing will change."
Exactly, Dave. If the feds really want to act in consumers' best interests, they will madate that cable companies make a la carte subscribing an option. The cable monopolies insist it's impossible, but I don't believe that for a second.
where i live i can get about 12 channels over the air with just a pair of rabbit ears, including the major networks. also can watch movies on HULU. i do miss ESPN, but can't afford even the basic packages starting at $50/month just to watch sports. sucks that MNF is now on ESPN, so we have to pay to watch it...with the commercials. even when i graduated from college i could barely afford cable, so i only had it during football season, didn't miss cable the rest of the year. boggles my mind we continue to pay to watch TV when it's all crap reality shows.
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Take an extra step before donating to a charity that claims to be helping tornado victims: Research them first.