Your Cable Company Is Ripping You Off

2008 February 17
by Kyle Bumpus
from → Economy, Frugality

I have long maintained that cable television is a rip-off.  To begin with, Comcast is the only choice in my area  (that nothing resembling competition exists in this market is the first tip-off that you’re about to take it in the wallet) but it wasn’t until I stumbled upon this JD’s Cheap Alternatives to Cable Television post over at getrichslowly.org that I realized the full extent of the rip-offery.  In my case, I pay $48 per month for television I watch perhaps 10 hours per week which works out to about $1.11/hour not counting the electric bill.  Not bad, you might say.  I disagree.

300 Channels and Nothing’s On

I have a problem: there are too many damn channels I don’t want.  I watch probably 3 channels regularly:  Comedy Central, Cartoon Network, and ESPN (and ESPN2, ESPNU, ESPNMiddleSchoolRecess, etc).  In fact, if I weren’t such a sports fan I would probably be fine without cable altogether.  I tend to watch more DVD’s than TV anyway thanks to netflix.  Unfortunately, most of the games I want to watch are on cable.  Sure, I could go to a sports bar to watch the game, but I would spend far more on beer and chili cheese fries for just one or two games than I pay for an entire month of cable, so clearly that’s not a viable alternative either for my wallet or for my waist-line.  I could watch the game at a friend’s house, but then again, not many of my friends like the same teams I do so they probably wouldn’t be interested.  And so, I continue to pay the full price of cable for just a few channels.

There’s Got to be a Better Way!

Of course there is.  Why not offer channels a la carte?  I would gladly pay $3 per month JUST for ESPN and perhaps 3 or 4 other channels.  This would allow me to get every bit as much enjoyment out of my cable as I get today but at 1/3 of the price.  I can see why the cable companies would balk at this business model, however.  They would become merely a conduit between media providers and the public which would severely dampen their ability to push through price increases on consumers.  In Comcast tried to raise prices, for instance, media providers would merely choose another distribution method to get their content to the masses.  As it stands today, they don’t have that option so the public suffers unreasonably high price increases.  

Furthermore, the current system stifles innovation and the presentation of alternative ideas.  Small niche channels which have a limited appeal to the masses simply cannot survive under the current system.  If Comcast makes the decision that not enough of its viewers would enjoy watching a new channel, it will refuse to carry it and the niche media producer has no recourse.  Under an a la carte per channel system, these small channels would have a chance to find their niche viewers and thrive.  And because only those people who were truely interested in that specific type of media would be likely to subscribe, this type of system would provide a side benefit to advertiser:  a group of highly-targeted and captive consumers.  Any Marketing 101 textbook will tell you that advertising to a targeted demographic will bring much better results than throwing up a Hail Mary and hoping for the best.

It’s a Question of Capitalism 

To me, this is an anti-trust issue.  Washington needs to step up to the plate and break up this artifically-created monopolies for the good of humanity.  I feel as if I should be allowed to pay only for the content I want to see and not subsidize sub-par or uninteresting channels (to me) merely because my cable provider decides to carry them.  To force me to do so is anti-competitive, to say the least.  I’d be interested to hear any other suggestions for possible distribution systems of the future.  The internet is an obvious venue but surely there are others.  What do you think?

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2 Responses
  1. 2008 April 30

    Wow! You couldn’t have expressed my feelings better! This is the specific reason I’ve never subscribed to cable: hundreds of channels with nothing to watch.

    :-) I came across this at the C of Money Stories & will link to it at Funny. Thanks for the coherent thoughts on this subject.

  2. 2012 December 6

    I’ve used both services and perlonasly the only beef I have is with DirectTV. It’s actually a small complaint and that’s they don’t have their own internet service package like Comcast does. If you want to have DirectTV be your ISP (internet service provider), you need to go through one of their third parties. Personally, I’m not a fan of third parties. Comcast gives themselves an advantage with the package they offer. Since I live in NY, we use Optimum Cable which is the exact same thing pretty much as Comcast.

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