If cable TV prices continue to increase at the rate they have over the last 5 years, the average cable bill will be $140.83 by 2020.
In 2011, the average cable TV bill was $73.35 a month. In 2016, the monthly cost reached a whopping $103.10. That’s an average annual increase of just over 8 percent during the 5-year period, and there’s no reason to believe things will slow down any time soon. Not surprisingly, cable packages are expected to get more expensive this year again, as providers tack on hidden fees to customers’ bills to further drive costs up.
Cable TV Prices Are Significantly Outpacing Inflation
While cable prices have been going up by over 8 percent a year, the average US inflation rate in that same time frame was just 1.83 percent. In other words, cable TV prices have increased at more than 4 times the overall rate of US inflation over the past 5 years.
This year, cable TV prices are expected to see another significant bump as most of the major providers are expected to hit their customers with additional fees. According to Consumer Reports, some of the notable providers increasing prices include:
- Most AT&T U-verse plans are expected to increase by $2-$8 a month. Additionally, the company is increasing it’s local TV add-on fees from $5 to $6 a month.
- Comcast already increased its prices by nearly 4 percent on average across its plans. Additionally, some of their add-on fees are increasing, including local broadcast TV fees which are going from $5 to $7 a month and regional sports networks fees are jumping from $3 to $5 each month.
- Cox customers are expected to see an increase of around 2 percent across its cable packages. On top of this, the company is increasing its local broadcast fees from $3 to $4 on all packages, and its regional sports fees are expected to go up to as high as $6 a month, depending on the customer’s market.
For their part, the cable companies are blaming the rising prices of their service on the increasing costs of programming contracts, particularly with broadcast networks and regional sports channels. But as more options arise for getting TV through non-traditional means (i.e. streaming video services), many customers don’t care to hear the excuses and are dropping their cable service.
More People Continue to Cut the Cord
Unsurprisingly, as prices continue to climb at an alarming rate, many customers are saying “enough is enough” and cutting the cord. In just the second quarter of 2016 alone, the top 11 pay TV companies lost 665,000 subscribers, more than double the losses from the same time period in 2014.
Meanwhile, live streaming services that offer the same pay TV channels as cable at a lower cost and without a contract, such as Sling TV, DIRECTV NOW, and PlayStation Vue, are continuing to grow and attract subscribers. And as YouTube, Hulu, and others enter the market with their own live TV offerings, one thing is clear — cable companies need to figure out something quickly before they lose even more customers, and time is running out.
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