Cable Rates

James sent me an email telling me that he was enjoying the blog and that he agreed with my a-la-carte opinion.  Thanks for writing!  But he also asked the following excellent question, which I thought was worth sharing with everyone.

...what exactly is it that keeps cable rates from going down? The infrastructure hasn't changed that much since it was introduced (I mean method of delivery, not actual technology - I'm aware of fiber's impact on the cable industry), and the changes that have come about ought to have made it cheaper, not more expensive.

There are two separate issues in this question I'd like to address. First, cable operators continue to spend very heavily on upgrading and grooming their networks.  We are preparing for super-high broadband speeds and for much, much more in high definition video, both in new networks and our video-on-demand platform.  So even though the basic HFC (hybrid fiber coax) plant is deployed and will be usable for years to come, much is being done to remain in the forefront of the ever-changing demands of 21st century telecommunications. 

Despite this ongoing capital spending, it is also true that customers now have opportunities to save hundreds of dollars each year when they take advantage of any one of the bundling opportunities we make available to them.  I know that at Insight, over half of our customers subscribe to one of the bundled packages we offer, getting the  benefit of the discounts they bring. So, even if you hear that one benchmark rate -- the "Classic" basic video service rate -- may be increased at some time during the year, the discount opportunities we offer more than offset those increases.

Everyday, more and more customers are taking advantage of those savings.

Good for them and good for us!

Comments

[ARGO]

...what exactly is it that keeps cable rates from going down?

That is the question.

I still think a cable company would make more profit as a service provider for other companies rather than shoulder the full burden of costs.

What I mean is a cable company offer a platform to other media outfits and charge them for maintenance and overhead rather pass that cost to customers.

Just a thought...

Thanks again Mr. Willner for the Blog.

[Shiv]

I will say that I have been pretty happy with my Insight service overall since moving to northern Kentucky a few years back.

The thing that intrigues me about a la carte pricing is that my tastes are too varied and the packages offered are too broad. I end up overpaying on my cable bill each month for channels I would never watch in a million years just because one or two digital channels I DO want to have are included in a particular package. It's an annoyance, but I guess if I truly wanted my cable bill to come down I would just make the decision to live without those one or two channels.

I look forward to Insight continuing to roll out new HD channels and especially HD On Demand content here in NKY. I have gotten to the point where I actually watch very little programming that isn't in high def!

In terms of the bundles, I do appreciate the opportunity to save money by combining my cable service and internet service, but I am truly sick of getting junk mail offering me Insight Phone several times a month. I cannot imagine how much money is being wasted sending those out so frequently.