Cable TV bill rate hikes slow amid cord cutting and mergers
https://finance.yahoo.com/news/cable-tv-bill-...5021.html#
The average monthly cable television bill hit a record $99 this year after rising 8% a year since 2010, but the outlook for next year is looking better for consumers.
Comcast, the largest U.S. cable operator, (CMCSA) announced that the rate for its most popular plan is going up 3.9% next year. And while there's a mix of increases for some of its other plans, the charge for adding premium channel HBO is going down from $22 a month to only $15. Meanwhile, analysts expect Time Warner Cable (TWC) and Charter Communications (CHTR), the second- and fourth-largest operators, won't raise rates much while their $55 billion merger deal remains under regulatory scrutiny.
Could it be that the millions of people forgoing or cutting back on cable television service -- the so-called cord cutters and cord shavers -- are finally having an impact?
That's definitely part of the cable companies' calculus. The number of households paying for TV service has been on the decline for several years, with almost another 1 million customers dropping over the past six months, according to research firm MoffettNathanson. A filing this week from Walt Disney (DIS) disclosed that its ESPN sports network has lost 7 million subscribers, a 7% decline, since 2013. At the same time, Internet streaming services from Netflix (NFLX), Amazon (AMZN) and others are growing quickly.
"The cable companies are trying to run a business and they're seeing costs rising on the programming side," says Bruce Leichtman, president of the Leichtman Research Group. "At the same time, the market is saturated, even shrinking slightly, so they don't want to raise the price of their bundles at the rate of increase of their programming costs."
Comcast is rolling out its rate increases over the next year according to the dates set in various franchise agreements it has signed. New prices hitting the Philadelphia area in January will reach the rest of its territories over coming months, says a spokeswoman. The 3.9% hike hitting the company's most popular triple play plan of television, Internet and telephone service doesn't just impact the advertised price but includes increases to fees, as well. Digital adapter prices jump to $4 a month from $3, and the somewhat amorphous "broadcast TV fee" hits $5 a month from $3 currently.
Comcast says it is adding faster Internet service and other features, while putting the blame for price increases mainly on programmers. "We continue to make investments in our network and technology to give customers more for their money," the company said in a statement. "Unfortunately, the cost to deliver programming continues to increase significantly – especially broadcast television and sports programming – which are the largest drivers of increases in price adjustments."
The 32% drop in the price of HBO is likely more directly attributable to the cord-cutting phenomenon. Comcast declined to comment on the change, but HBO owner Time Warner (TWX) sought to reach more cord cutters with a new Internet-only HBO service called HBO Now that it introduced in March at a cost of only $15 a month.
Meanwhile, regulators are still scrutinizing the proposed Time Warner Cable-Charter Communications deal announced in May. Rivals from other segments of the industry have sought to have the deal blocked. The companies said in October that they don't expect the deal to close until 2016, after previously targeting a year-end approval.
https://finance.yahoo.com/news/cable-tv-bill-...5021.html#
The average monthly cable television bill hit a record $99 this year after rising 8% a year since 2010, but the outlook for next year is looking better for consumers.
Comcast, the largest U.S. cable operator, (CMCSA) announced that the rate for its most popular plan is going up 3.9% next year. And while there's a mix of increases for some of its other plans, the charge for adding premium channel HBO is going down from $22 a month to only $15. Meanwhile, analysts expect Time Warner Cable (TWC) and Charter Communications (CHTR), the second- and fourth-largest operators, won't raise rates much while their $55 billion merger deal remains under regulatory scrutiny.
Could it be that the millions of people forgoing or cutting back on cable television service -- the so-called cord cutters and cord shavers -- are finally having an impact?
That's definitely part of the cable companies' calculus. The number of households paying for TV service has been on the decline for several years, with almost another 1 million customers dropping over the past six months, according to research firm MoffettNathanson. A filing this week from Walt Disney (DIS) disclosed that its ESPN sports network has lost 7 million subscribers, a 7% decline, since 2013. At the same time, Internet streaming services from Netflix (NFLX), Amazon (AMZN) and others are growing quickly.
"The cable companies are trying to run a business and they're seeing costs rising on the programming side," says Bruce Leichtman, president of the Leichtman Research Group. "At the same time, the market is saturated, even shrinking slightly, so they don't want to raise the price of their bundles at the rate of increase of their programming costs."
Comcast is rolling out its rate increases over the next year according to the dates set in various franchise agreements it has signed. New prices hitting the Philadelphia area in January will reach the rest of its territories over coming months, says a spokeswoman. The 3.9% hike hitting the company's most popular triple play plan of television, Internet and telephone service doesn't just impact the advertised price but includes increases to fees, as well. Digital adapter prices jump to $4 a month from $3, and the somewhat amorphous "broadcast TV fee" hits $5 a month from $3 currently.
Comcast says it is adding faster Internet service and other features, while putting the blame for price increases mainly on programmers. "We continue to make investments in our network and technology to give customers more for their money," the company said in a statement. "Unfortunately, the cost to deliver programming continues to increase significantly – especially broadcast television and sports programming – which are the largest drivers of increases in price adjustments."
The 32% drop in the price of HBO is likely more directly attributable to the cord-cutting phenomenon. Comcast declined to comment on the change, but HBO owner Time Warner (TWX) sought to reach more cord cutters with a new Internet-only HBO service called HBO Now that it introduced in March at a cost of only $15 a month.
Meanwhile, regulators are still scrutinizing the proposed Time Warner Cable-Charter Communications deal announced in May. Rivals from other segments of the industry have sought to have the deal blocked. The companies said in October that they don't expect the deal to close until 2016, after previously targeting a year-end approval.
