CHARLOTTE, N.C. — If it seems your TV bill has just kept going up in recent years – well, it isn’t an illusion. Myriad other products may have gone on sale during the recession, but not cable, satellite or fiber-optic television services.
The cost of cable and satellite service has risen 42.5 percent in the last 10 years, outpacing the overall rate of inflation, according to the Bureau of Labor Statistics. Cell phone and Internet services have come down in price. The cost of TVs has fallen dramatically.
But the rise of DVRs and high-definition channels has added new layers of technology. And the fees cable and satellite companies pay for programming continue to increase – the cost of carrying ESPN, for instance, is substantial – and they’re passing those along to consumers.
For the most part, they know they can, thanks to customers who haven’t shown much willingness to jump the fence to cheaper pastures.
“Historically, particularly when the economy is poor, one of the last things households will consider cutting is their pay TV,” said Mike Paxton, pay TV analyst for research firm In-Stat. People tend to stick with what they have, Paxton said, largely because it’s a pain to switch TV providers. And for many, the starkest alternative – switching to free over-the-air TV, with limited channels – would be unbearable. But, he said, there’s more competition than a decade ago, and that’s forced operators to improve the customer experience.
In most areas, traditional cable companies battle with fiber-optic service and satellite providers for customers’ business. Although the competition generally hasn’t brought prices down, experts say, it may keep them from rising dramatically for now.
The number of people who pay for TV has remained relatively stable. But within that pie, cable has been steadily losing ground to satellite services and, especially in recent years, telephone companies.
Cable lost about 1.1 million subscribers last year, according to In-Stat, while satellite gained 1.2 million and phone companies added nearly 2 million.
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