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Report: Cord Cutting Caused by 74% TV Price Hikes Since 2000

Cord cutting is being caused primarily by a 74% increase in customer cable bills since 2000, according to market analysis by Kagan, S&P Global Market Intelligence. That increase is even adjusted for inflation, and it should be noted that individual earnings have seen a modest decline during that same period, making soaring cable rates untenable for many. This affordability gap is "squeezing penetration rates, particularly among the more economically vulnerable households," the research company added.

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As their chart (left) illustrates, prices for multichannel packages have steadily risen from just below $60 a month in 2000 to close to $100 in 2016. All while incomes remained largely stagnant.

Last year, the top pay TV providers lost between 1.5 and 2 million subscribers depending on the data you're looking at. And while some pay TV providers have embraced the natural evolution toward cheaper streaming alternatives (AT&T's DirecTV Now, Dish's Sling TV), many cable and broadcast operators have simply doubled down on the high prices and lackluster customer service that put them in this position in the first place.

"The eroding legacy multichannel affordability partly explains the popularity of over-the-top services such as Netflix and Amazon's Prime Video,” Kagan said in a statement.

As customers grow increasingly angry at cable TV rate hikes and defect to streaming alternatives, most cable operators are simply raising the price of broadband (often via usage caps and overage fees) to try and make up for lost revenue. And because most parts of America still don't really see healthy broadband competition, they can consistently get away with it.

Most recommended from 29 comments



ArrayList
DevOps
Premium Member
join:2005-03-19
Mullica Hill, NJ

14 recommendations

ArrayList

Premium Member

Nope

I cut the cord because I didn't want to pay to be advertised to.

buzz_4_20
join:2003-09-20
Dover, NH

13 recommendations

buzz_4_20

Member

I'm Shocked

Stagnant wages combined with price increases hurt product sales.
hapster
join:2011-04-05
Shepherdsville, KY

9 recommendations

hapster

Member

Everything was fine ...

I was happy with what I paid for analog cable + internet, with no cable boxes and my own modem and DVR. I had no choice but to get boxes, once they went digital in 2010, which also rendered my DVR all but useless. My bill climbed steadily from around $70 to $212.

Switched to satellite and thought it was awesome. For a while. Then that bill climbed through the roof too. Had no desire to keep playing their games, and cut the proverbial cord.

Have been so much happier with OTA and streaming. Knowing I can drop or change services at any time, just makes it that much better. I'm still paying more than that $70 I was paying in 2010, but I can live with $65 internet plus whatever streamers I care to use.

jig
join:2001-01-05
Hacienda Heights, CA

7 recommendations

jig

Member

Good collection

Nice collection of data for a good article. Thanks!

Zenit_IIfx
The system is the solution
Premium Member
join:2012-05-07
Purcellville, VA

7 recommendations

Zenit_IIfx

Premium Member

Logarithmic increase soon?

I'm expecting a logarithmic increase in traditional linear TV rates soon. $800/month for basic cable anyone? Oh, don't forget those rental fees.
ncted
join:2010-10-25
Durham, NC

6 recommendations

ncted

Member

I can hear it now

Who thinks this phrase has actually been uttered in a boardroom meeting "time to double down on the high prices and lackluster customer service" ?
TurbSeap
join:2014-08-19
Boise, ID

5 recommendations

TurbSeap

Member

Mostly true..

As a sports fan, I'd have to echo this as well..

If Cable offered me the channels I get from YouTubeTV at their $35 flat pricing, I'd be a cable sub.
I refuse to participate in their extortion pricing, package schemes and nickel and diming for decade old junk tv box hardware, etc.

They did this all to themselves honestly.

odreian615
join:2006-01-18
Chicago, IL

4 recommendations

odreian615

Member

Lack of 4K content is killing cable and pay tradional cable networks

You pay $1000 for a 4K TV, plus the $200 a month for cable, but have almost no 4K content on that $200 service. Netflix or Amazon prime have more 4K content than all of the pay cable networks combined.

Economist
The economy, stupid
Premium Member
join:2015-07-10
united state

3 recommendations

Economist

Premium Member

And MSO response?

More 3X inflation price increases while cutting services.
mmmdonuts
no regerts
join:2011-02-28
Raleigh, NC

2 recommendations

mmmdonuts

Member

Options, options, options...

There wouldn't be as much cord cutting without the alternatives that are available now.