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The cable industry keeps finding new ways to bleed its customers dry

July 10th, 2020 at 7:15 PM
Cable vs streaming
  • The ongoing saga of the cable vs streaming tug-of-war (which has had mostly the streaming side winning for more than a year now, as the cable industry keeps bleeding subscribers) continues to garner new headlines that are, sadly, pretty predictable at this point.
  • Spectrum, for example, is among the many cable brands that have greeted an inexorable decline in customers by continuing to raise prices.
  • It’s the kind of behavior that will no doubt continue to inspire consumers to cut the cord and go all-in on streaming and digital TV services.

Earlier this year, like so many of you now, I finally cut the cord and ditched my Dish subscription — something I was finally compelled to do after reaching my breaking point over a mix of subpar service, an inscrutable monthly bill, and a price-to-value ratio that was just too out of whack. Contrast that with the near-universal user appreciation of Netflix, which a new survey from the Cowen & Co analytics firm has found is so strong that 55% of subscribers would be fine with paying a little more each month to keep the service. The larger point being — the coronavirus pandemic has changed many of our viewing habits, but not the habits of … everyone, shall we say.

Case in point: The cable industry is up to its usual shenanigans, never mind that it continues to lose customers at a rapid clip. You can probably guess what we’re referring to — more despicable fee increases, representing the industry’s ongoing attempt to manage its decline by bleeding customers dry.

This latest news comes from the website Stop the Cap!, which cites Spectrum employees as confirming that a rate increase for its cable TV customers is coming as soon as next month. (A spokesman also confirmed the increases when contacted by Ars Technica).

In terms of what’s actually coming, the $2.95/month Broadcast TV Fee surcharge is being increased to $16.45/month (which equates to almost $200 more over the course of a year). Also, Spectrum’s TV Select package is going up from $1.50/month to $73.99/month. “Customers on a promotional pricing plan will not see this rate increase until their promotional pricing expires,” Stop the Cap! notes, adding that: “Customers bundling multiple products should expect discounts to reduce that cost a bit.”

Granted, you could counter this news with recent price increases at streaming TV services like Hulu and YouTube TV, with the latter having just bumped its price to $64.99/month after adding eight new channels. Likewise, the price of Hulu’s tier that includes live TV has also steadily increased., with the cheapest plan now $55/month.

All that said, however, options like those still represent generally more affordable alternatives to traditional cable packages after the latter has tacked on equipment rental charges and all sorts of other miscellaneous fees that aren’t always easily understood when you get your monthly bill. Stop the Cap! notes that Spectrum’s increased Broadcast TV fee apparently “covers the retransmission costs local broadcasters charge the cable company to carry their channels on the cable system. Spectrum breaks this fee out of the monthly cost of cable TV and places it as a separate line item on your bill.”

The site goes on to note that practice also “conveniently allows the company to pass through rate increases even if you are on a price-locked promotional pricing package typically offered to new customers.”

Andy is a reporter in Memphis who also contributes to outlets like Fast Company and The Guardian. When he’s not writing about technology, he can be found hunched protectively over his burgeoning collection of vinyl, as well as nursing his Whovianism and bingeing on a variety of TV shows you probably don’t like.

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