| Check out Programming Cost Increases in Public Filings Industry wide, programming cost increases for cable operators average about 9% per year while video price increases to customers average about 4% per year. Profit margins on average actually decreased in the third quarter compared to the second quarter.
The market is indeed competitive and cable's competitors routinely implement price hikes, since programming increases affect satellite, Fios and U-verse, too. Read company transcripts and see how all of them complain about programming rate increases and a need for Congress to revisit retransmission rules. (You can find them on seekingalpha.com.)
Content providers like Disney make cable operators buy channels in bundles just like consumers. Do you want ESPN? Then you'll have to take crap channels 1-6, too. It's one reason why Comcast wants to buy NBCU -- to get some leverage to challenge the racket of the programming price increases.
Does that mean that cable is no longer evil? No. Does that mean the cable's main priority isn't profits any more? No. In this particular case, though, they have a point in a matter that hits all of us (cable, satellite and phone co. subscribers)
in the wallet.
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| said by discojulio :
Comcast wants to buy NBCU -- to get some leverage to challenge the racket of the programming price increases.
No comcarp cable wants kill off dish and direct tv owning good channels and not carp like VS. |
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| reply to discojulio
Yes, they want in on the 'game' the content providers are playing. That's their point in the matter. It will help them and they will STILL increase the price per usual. They'll get a double win! Vertical integration is a "wonderful" thing for the "big". |
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