Comcast CEO Brian Roberts acknowledged this week that you can’t keep raising prices forever… but that doesn’t mean prices can’t go up next month! Ars Technica flags a report from The Hollywood Reporter that reveals Roberts told a Goldman Sachs telecom conference this week that “you can’t keep raising the price [of cable bundles] forever” because “these things have a way of correcting and balancing out before something draconian happens.” However, Ars notes that Comcast is set to unleash a major round of price hikes in several markets across the U.S., including in Oregon and New Mexico.
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A major study of cable prices by the Federal Communications Commission released last year found that cable prices have been rising at more than double the rate of inflation. Specifically, the FCC found that the compound average annual rate for expanded basic cable services between 1995 and 2013 was 6.1% while the compound average annual growth rate for the CPI over that same period was 2.4%.
The cable industry has often justified these price increases by blaming content providers for raising their royalties for the rights to broadcast their shows. While that is certainly a big part of the equation here, Ars notes that broadband prices have been increasing lately as well, which isn’t surprising since Comcast is likely trying to make up for lost pay TV revenue with increased broadband revenue.