Cable Industry News: Survey Suggests Drastic Cost Increases for Pay TV

  • Pay TV could cost as much as $200 a month by 2020, according to a new survey from NPD Group. Compared to today’s $86/month rate, the rise seems rather drastic, especially when considering the rise of online content services.
  • “As pay TV costs rise and consumers’ spending power stays flat, the traditional affiliate-fee business model for pay TV companies appears to be unsustainable in the long term,” said Keith Nissen, research director for The NPD Group. “Much-needed structural changes to the pay TV industry will not happen quickly or easily; however, the emerging competition between S-VOD and premium-TV suppliers might be the spark that ignites the necessary business-model transformation of the pay TV industry.”
  • The majority of pay TV subscribers have stuck with their services despite the trend to cut cords in favor of streaming services. The main reason for staying with their services is lack of content, especially live sports, as well as the convenience of getting all their content from one source.
  • As prices go up, however, these reasons might not be enough to keep customers. Online options will become even more appealing if consumers don’t have to worry about going over their broadband cap.
  • “So the question for TV consumers is: Do you keep paying $86 today for access to a walled garden of really good content that will likely to continue to rise in cost? Or do you go outside the walled garden and scramble to get your regular shows while fighting the caps and agreements that will eventually make the world outside the walled garden inhospitable for a TV lover? And the bigger question is whether or not the FCC or anyone in Washington is watching this play out and plans to help the consumers by taking action?” GigaOM asks.

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