Kokomo Tribune; Kokomo, Indiana

Columns

July 4, 2014

JEFFREY McCALL: Pay TV consumers are fed up with price hikes

A la carte pricing could win over new customers

The pay television industry has become the Rodney Dangerfield of the corporate world. It gets no respect at all. Unlike Rodney’s audiences, however, nobody is laughing. The cable and satellite television industry has well-earned its disrespect by a long-running pattern of customer abuse.

Pay television prices continue to climb well over the rate of inflation. Most subscribers have seen their bills increase up to 6 percent each year during the last decade. Cable and satellite television distributors force new channels into the lineup and charge subscribers for each additional channel. According to Nielsen Media Research, however, the average consumer watches only about 18 of the 180-plus channels he or she pays for. That 18-channel figure has remained the same for a decade, while distributors have added an average of 50, mostly unwatched, channels to the average customer’s lineup and monthly bill.

Customers are tired of paying for content they don’t want and don’t watch. Yet, the pay television industry refuses to move toward a la carte programming in which consumers could select and pay for only those channels they prefer. This is not a technical issue; the technology that would allow for a la carte pricing has been available for more than 20 years. Cable and satellite TV companies have no trouble blocking premium channels such as HBO or Showtime now.

The pay television industry has long suffered from low consumer ratings, and the evidence keeps piling up. The American Customer Service Index researched 43 industries by polling consumers nationwide. Pay television was rated second from the bottom, with only Internet providers being ranked worse. Of course, for many Americans, television and Internet services are provided by the same company.

The May issue of Consumer Reports featured a front-page headline that read, “Break Free from Cable,” and an inside article on customers’ concerns about their cable distributors.

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