Cable: Higher Prices and more Competition, how does it Survive?


The New Year dawned with some bad news for both cable companies and cable TV subscribers.

If you love your cable TV, you can expect to pay more for the privilege in the coming year. Major carriers including Time Warner, AT&T, UVerse, DirecTV, and others have all telegraphed price increases in the coming year. So, if you have been considering renewing with a promotional deal, now might be the time.

But if you’re not, it’s not the end of TV as you know it. The rates are only expected to go up about $7 per month for some, less for others. So, not exactly the rent money. Cable providers could trumpet this “small” increase as an opportunity to offer better programming. In other words: This is what we’re giving you, look at how little we have to charge to give it to you.

But, in a world where a Netflix subscription is around ten bucks a month, that seven dollar increase looms larger than it is. Because of these skewed dynamics, some cable providers are going with a different PR tactic to announce the increase. Finger pointing. Well, of course they are.

Here’s the line, you decide how it plays for you. We’ll pull it directly from a letter sent to DirecTV subscribers as reported by CNN.

“Every year, the owners of the television channels you watch demand higher prices…”

Time Warner, in contrast, put most of the blame on broadcast and sports programming costs, so local channels that reflect local news and events customers want to see.

Both arguments boil down to: don’t blame us. Blame all those programs you like to watch. This might make the cable companies feel better, but it’s one more example of an industry that does not understand its customer base. Nor does it realize the trends of media viewing. Not that this is anything new. The music industry insisted nothing was going to change. Napster was an apparition. Then came iTunes and Spotify and YouTube. Cable has looked down its nose at streaming video in exactly the same way. And it is likely going to pay the same price…unless it can figure out a reason to entice its customers to choose otherwise.

Ronn Torossian is the 5WPR CEO and founder of the Ronn Torossian Foundation.

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