A New Way To Gyp Cable TV Subscribers

The cable and telecom companies have come up with a new way to get more money out of their subscribers. They will offer less expensive plans with many fewer “stations”. That means the cost to subscribers for full programming services with hundreds of channels could rise. The cable and telecom firms can pay content providers less for these “inexpensive” customer packages because they are buying for less programming.

The cable companies argue that the new plans are good for consumers. Customers can opt for smaller and less expensive packages if they cannot afford full service because of hard economic times. The difference between a cheap plan which might cost $40 and one with hundreds of channels that sells for $80 a month is not very great, especially for Americans who watch hours of TV a day.The  firms have another economic incentive to build less expensive services and it has nothing to do with helping consumers. Reuters writes that if the industry creates the new system it  “could give cable companies an advantage in competing with cheaper Web TV services offered by companies like Google, Netflix and Apple.”  TV companies are trying to combat the paradigm shift in how consumers get their video content.

TV service providers can use cheaper program packages for two important reasons. One is to save program costs on subscriptions with a modest number of channels and with that the opportunity to upgrade consumers to full service which will cost more than it does now. The other is to flank new technology.

The consumer move toward new avenues of content may be inexorable. The cable companies mean to pull as much out of their subscribers’ wallets as they can in the meantime.

Douglas A. McIntyre