Is cable TV really that expensive?

October 17, 2005

1 Min Read
A Cable Fable

NOON -- We have some shocking news from some random policy wonks called The American Consumer Institute. Their findings: Cable TV is climbing in price faster than pomade. Really:

In five years, consumers will have paid $107 billion too much for cable TV services because of a lack of competition, with older consumers overpaying by $1,156 per household...

The study... finds that:

  • Consumers spend more on televisions and television service, than drugs, tuition, or personal care products;

  • Older consumers pay a greater proportion of income for cable TV services;

  • Cable TV service prices have increased 7.5% per year, faster than prescription drugs, nonprescription drugs and medical supplies; and

  • Lack of competition is the key reason for high cable TV service prices.

[emphasis added]

I haven't read the study, but I've noticed it seems to get its shock value by comparing cable to unrelated (and more essential) household items. The implication is that cable is at least as important as all these other things like medical supplies, drugs, leave-in conditioner, etc.

Well, it's not.

Why not compare cable to cable? Has the service, channel selection, quality of programming, etc., improved during the time that prices have jumped? Or, better, does a satellite system offer more stuff for less money? (Short answer? Yes!)

— Phil Harvey, Hairdo, Light Reading

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