Consumers are cutting the cord in droves and increasingly replacing traditional cable TV packages with skinny bundles and streaming options. And, of course, in the face of that existential threat, what do cable providers do in response? Jack up prices on their remaining customers, it seems.
That’s according to new data from consumer research firm Leichtman Research Group, Inc., which found that the average cost that households pay each month for cable has gone up to $107, which would be almost $1,300 a year. That’s up 1 percent from last year, which the firm says is partly the result of an increase in fees related to things like regional sports licensing. If you go back to 2010 though, today’s average cable bill is up more than 50 percent.
You could look at that and say, okay, lots of things are way up if you compare today to 2010. Consider, though, that Netflix was still not the mostly-streaming giant it is today back in 2010. It had only just passed 20 million subscribers by the end of 2010, and DVDs were still a big part of its rental business then, meaning the big spike in cable bills between then and now has come as Netflix has turned itself into a must-have entertainment option that gives consumers on a budget a pretty easy choice when they’re weighing a cable bill versus paying a few bucks a month, comparatively, for Netflix.
Among other results from the LRG data, meanwhile, is the fact that around 78 percent of US households say they still subscribe to paid TV packages. That’s down from 86 percent five years earlier. A Streaming Observer report about the findings makes the point that that’s still a high number of people paying for cable bills that are a lot more expensive than streaming video alternatives — though most say they’re doing so “because their internet and/or phone service is bundled along with pay TV. In some areas, particularly rural areas, these bundles are the only way to get high-speed internet or landline service.”
The firm’s data was gathered through a telephone survey of 1,152 households from around the US.
“Due to these ever-rising costs, more and more households are cutting the cable for good, taking advantage of streaming services that offer skinny bundles of popular channels at a fraction of the price, like Philo (starting at $16 a month) and Sling TV ($25+ a month),” Streaming Observer reports. “In a separate study, market research firm eMarketer found that the number of households cutting the cable has risen 32.8% this year. 33 million people are expected to cut the cable this year.”
