Hey Cable Industry. We Need to Talk...
According to a new study by the NPD Group
, the average
cable bill will top $200 a month at current rates. While consumer income remains relatively flat, cable rates have been rising an average of 6 percent per year. Cable operators blame high broadcaster programming rates, but cable operators are culpable too -- raising rates on numerous services like DVRs, while imposing new fees if you want to pay your bills in person
Most consumers continue to shell out money to their cable operators, but as more and more people realize they're paying a lot of money for what's predominately large piles of junk content, they're making the slow but steady shift to Internet video
. As such, cable operators seem to have a sense of invincibility, and continue to absolutely refuse to seriously compete on price.
One million consumers cut the cord for Internet video in 2011, and there's more than a few people warning that if the cable industry doesn't reign in pricing soon, they're going to get a swift kick to the digital high definition posterior. Standard and Poor's rating agency recently warned
that the cable operators may soon start seeing serious hits on VoIP subscribers as users start to go cell only in order to offset soaring TV costs.
The one saving grace for the cable and broadcast industry is that they're doing their best to strangle alternative options like Netflix to death using bandwidth caps, soaring content costs and absurdly restrictive licensing
. However, strangulating innovative competitors while hiking prices mercilessly is not sustainable in the face of organic Internet video evolution, and something has to give.
“As pay-TV costs rise and consumers’ spending power stays flat, the traditional affiliate-fee business model for pay-TV companies appears to be unsustainable in the long term," insists Keith Nissen, research director for The NPD Group. "There is an open window for the industry to meet consumer needs and become to television what iTunes is to music," says NPD. "However, there is also a definite risk if pay-TV providers don’t capitalize on the opportunity -- and soon."