Noted: An interesting report about the cable TV industry from the cable industry highlights the benefits to consumers. One early point: Instead of just a few dozen channels in 1998, the now-60 million cable customers get hundreds of channels, movies and TV shows on demand and phone and Internet service.  Of course, the price has change too. Instead of the average cable subscriber paying $27/month in 1998, they pay approximately $100.

The report, prepared by the Microeconomic Consulting & Research Associates for the National Cable & Telecommunications Association, examined the industry’s response to policymakers and whether it benefited consumers.

Conclusion: “In sum, we find that consumers have benefited enormously from the cable industry’s investment in infrastructure and development of new digital services. In fact, we estimate that the total benefits to all U.S. consumers are now approaching $35 billion annually.”

Biased? It’s not supposed to be. Apparently, the cable industry and researchers cringe everytime the Federal Communications Commission says that video prices are rising to the detriment of consumers. This is a report to point out how much money the industry has invested in the technology and how much cable now has to offer. 

By offering multiple services, like video and home phone, cable providers can improve the quality of all services and most importantly, charge a wee bit less. No doubt, cable Internet is so much better than dial-up or DSL. And it’s very convenient to get home phone service bundled with TV.  Bundled savings are between $5 to $50. The report even pulls from Orange County’s Cox Communications to show the savings (these prices are from March 2009 and have changed):

Of course bundles make sense because it means a company is making more money per customer. It also means the company has a very committed customer. For a triple-service customer to leave, that means canceling a phone number and possibly an e-mail address and losing all his recorded videos. 

So whether it’s cable companies offering generous promotions to move to bundles or consumers just want everything in one bill, these double and triple packages are a high growth area. The report does overlook one major issue: poor customer service. Being in my position where I hear frequently from consumers about their cable frustrations, it makes me wonder if people wouldn’t mind paying even more for cable services if service improved.

The report goes on. And on. And on. It loses me well before I reach this:

But as mentioned earlier, the report does conclude the cable industry’s investment in its product for the past decade has benefited consumers. Even as the industry is losing customers to competitors like Verizon FiOS and AT&T U-verse, the number of digital video and bundled subscribers is growing. And because of that, you can’t just compare price changes over the years. Feature changes need to be included in the mix. Decide for yourself by reading the full report HERE (a PDF) or just the press release.

More TV news:

You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.