Cable
continues to
sucker us
Posted May
27 2008, by
Kim Peterson
The
New York
Times
examines
why we keep
paying for
cable, even
though
prices have
risen 77%
since 1996.
Cable
customers
generally
pay at least
$60 a month,
but only
watch 13% of
the channels
available.
Sounds like
a rip off,
doesn't it?
But people
accept the
charges and
continue to
subscribe in
growing
numbers.
The key
to cable's
success has
been
bundling
channels
together
instead of
letting
people pay
just for the
ones they
watch,
according to
the Times.
Cable
companies
say that
unbundling
those
channels
would give
lots of cash
to the most
popular ones
while the
rest suffer.
You'd
think our
addiction to
cable would
make cable
stocks a
winning
investment,
but that
hasn't been
the case as
the industry
faces
growing
competition
from telcos
and the
Internet.
Comcast
shares are
down 20%
from a year
ago, and
Cablevision
shares have
dropped
27%.
I just
downgraded
to Comcast's
basic cable.
I don't need
anything
more, with
iTunes,
Netflix
and sites
like
Hulu.com.
The only
thing I
really miss
is cable
news, but I
can watch
that online
as well. But
many people
don't want
to watch
video on
their
computer
screens, and
they don't
want to deal
with
connecting
their
computers to
the TV.
Tech
companies
are
addressing
this problem
by
developing
set-top
boxes that
bring
Internet
videos to
the
television.
Everyone
from
Apple
to Netflix
to
Hewlett-Packard
has a
box in the
works.
But that
part's easy.
The real
challenge is
getting
Hollywood to
distribute
all the
shows that
normally go
to cable.
When that
happens, the
cable
industry
might see
its
subscriber
trends
reverse.