Cable TV bills will be going up early next year, just as they do most years. That's likely to drive even more consumers away from cable, which in turn is likely to produce more price increases.
The TV/cable/streaming video business is in a transitional period and it's a little hard to tell what's going to come out the other end, although it's likely to be something that is a combination of Netflix and traditional cable, delivered via the Internet.
Until then, the cable business is stuck with high fixed costs -- all that cable to maintain -- as well as rising programming costs as it produces more new programming to compete with Netflix, Amazon, and other streaming providers.
What that means is higher bills for consumers who have not yet cut the cord. Time Warner, Comcast, Dish, and AT&T are all putting the final touches on the price hikes they'll impose in 2016.
Here are some of the expected monthly increases, as reported by Bloomberg Business:
- Time Warner: sports programming goes from $2.25 to $5;
- Comcast: broadcast channels go from $1.75 to $5, regional sports to $3;
- Dish: $2 to $8 per month, depending on the bundle;
- AT&T U-Verse: $2 to $4; and
- DirecTV: $4 to $8.
Dish subscribers will pay $2 to $8 more per month on TV packages. AT&T’s U-Verse customers will see a monthly increase of between $2 and $4, while satellite-TV provider DirecTV, bought by AT&T this year, will increase its monthly bill between $4 and $8.
Won't this drive away customers? No doubt it will. After all, 71% of cord cutters say they dropped cable partly because of cost, surveys show, but the cable companies say the licensing fees they're paying for programming are rising so fast that they lose money on some customers, which means their bottom line actually improves if those customers get mad and go away.
Time Warner, for example, says the cost it pays to carry local channels has gone up nearly 100% in recent years while the cost of some sports programming has risen 116%.
The higher prices may be a hardship for some consumers but, except for rabid sports fans and news junkies, most cable programming can be found elsewhere -- either on over-the-air channels or on streaming video.
HBO, Showtime, and other premium channels are moving at least some of their programming to the Internet and reruns of popular broadcasts and premium shows are showing up on streaming channels more quickly so those who bail out to save money won't be completely without entertainment options.