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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.

By MSN Money Partner Jun 14, 2012 9:23AM

This post comes from Quentin Fottrell at partner site SmartMoney.


SmartMoney on MSN MoneyWhile the fierce competition between cable companies and online video services should be good for consumers, experts say it may end up raising both TV and Internet bills.


Image: Watching television (© Corbis)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:

174Comments
Jun 15, 2012 8:20AM
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I wouldn't mind paying for cable and satellite if I didn't have to have commercials. I always thought that we paid for the cable so that they need less investors and commercials
Jun 15, 2012 7:45AM
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The problem is not only high prices but the customer is forced to pay for channels they never ever watch. My cable "package" includes, music, latin, shopping channels numbering over 50 that I would never ever watch. It needs to go al la carte or I will never have cable or even satellite again. Why should I be forced to pay for channles I do NOT want?
Jun 15, 2012 6:14AM
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nothing but netflix here and that’s getting cut at the end of the month! I don't think i should have to pay to watch people in their 20's or 30's drink till they pass out then not remember the next day. Australia did a study last year and scientifically proved reality tv makes people's IQ drop.

Jun 14, 2012 11:00PM
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$200 in 2020?????  I was paying $205 for cable just a few months ago.  I threatened to move to directTV and the cable company reduced my bill to $138 for the next 2 years.
Jun 14, 2012 9:23PM
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I'll go back to cable when I can choose the 4 channels I want instead of their 55 channel "special" that includes 6 shopping channels, 10 mexican channels, 8 preaching channels and 14 kids channels.  I dont miss commercials every 5 minutes either.
Jun 14, 2012 9:22PM
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We fired our satellite tv provider after 10 years;due to the price going up constantly. Luckily although we live in the country WISP Internet is available, so we stream over 10,000 movies/tv shows w/o ANY ads via Amazon Prime membership...$79/year averages $6.58/month! Also I put up a $39.00 Channelmaster outdoor antenna mounted on the old J-arm satellite mount to get locals too. Hulu Plus, Amazon Prime, Netflix = death of cable & satellite providers. Goood riddance!!
Jun 14, 2012 9:13PM
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It is always about greed and nothing is being done to stop it!
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Whos with me on this....I need a partner. All one has to do is undercut the price structure of the big cable companies. Offer currently structured cable package(s) for say $70.00 and the cable companies will lose subscribers like flies dying off in a Raid Fly Trap. Once your the only thing available in the game you can still keep the pricing structure and still make money.
Jun 14, 2012 8:55PM
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I'm on the verge of quitting direct TV pretty soon as the price is not worth the service. I receive HD programming locally by antenna which direct TV doesn't provide. The internet has a lot to watch also plus we should read more and go outside for a few walks once in a while instead of sitting on our behinds watching the boob tube. Spending over $100 a month for TV is getting a little nuts.
Jun 14, 2012 8:49PM
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Cable tv is already cheaper than the dish companies' I have tried the two major dish satelite companies and I got sick and tired of being charged for paid programming. I now have cable TV and it is cheaper,has better programming plus there is no paid programming in my package,no billing errors just one easy to read bill that dont leave you guessing.
Jun 14, 2012 8:48PM
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Terrible content combined with an awful distribution system of price-fixing cable and satellite companies demands one thing...CANCEL YOUR CABLE/SATELLITE SUBSCRIPTION TODAY and stop watching television altogether!  It will improve in terms of both content and subscriber options if you can show a little discipline.  Signed, just a dude who stopped watching television four years ago who would need to be paid to start watching again.
Jun 14, 2012 8:34PM
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cable co's, gov't, fcc, they all lie day in, day out and our polititions jus keep on a-heppin' um too.
Jun 14, 2012 8:33PM
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cable companies charge way to much. Tv used to be free to watch and now you cant even get a good signal at times with this so-called digital crap with rabbit ears, dont want to pay alot for a amplified antenna either because that probly wont come in good either. Charter cable keeps sending me adds that say they got a good deal for me and i tear it up and throw it in the trash. talk about wasteful. they are loseing money just sending out the adds to people who dont want it /or those that cant afford it. they gave me a deal for 10 bucks a month a few years ago and it was alright till they tryed to raise the price to 20 bucks a month. i told them i dont watch alot of tv and not going to pay more than 10 bucks a month for basic cable. The way i look at it  they havent made a dime from me since then. so they loseing alot of cash that they could be rakeing in.  their loss   hahaha i dont need cable    I got internet  :-)
Jun 14, 2012 7:03PM
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the question should be "will TV ever be any good to watch"
Jun 14, 2012 6:02PM
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Stopped watching T.V. years ago. I am beyond sick of paying only to be forced to watch commercials for 1/3 of the time (more for some channels). Not to mention that channels hardly ever present anything entertaining, let alone informative.

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.
Jun 14, 2012 5:57PM
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here in tampa bay fl. area we all the dish stuff plus 2-3 cable companies I stay on top of the promo's and change every six months or so to who is doing the best freebees which last for only six months or so . hell I'm on a first name basis with a bunch of installers and you would be surprized what a twenty dollar bill will buy from a guy making twelve bucks an hour.
Jun 14, 2012 5:49PM
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The cable companies need to fight the providers for their outrageous greedy fees.  They also need to realize that we're in a recession.  The reason people are cutting the cord is because they DON'T HAVE THE MONEY to keep paying these ever-increasing prices.  They do NOT need to try and cut into our internet. 

The market is changing.   Customers want to pick and choose their content.  The old model won't work anymore.  When networks and cable companies realize this, if they come up with an affordable model that allows us to choose our programming, then they will be able to sell more packages again.  Those may be cheaper, but there will be a hell of a lot more of them.  I'm a recent cord-cutter due to unemployment. You know what? I don't miss it that much.   I might go back when I get a job if the price would go down, and stay down. 
Jun 14, 2012 5:48PM
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In its infancy, the whole selling point of pay tv was no commercials. WTF happened?
Jun 14, 2012 5:48PM
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I already cut the cord, thanks to iTVmediaPlayer: http://itvmediaplayer.com 
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