May 24, 2008

Cable Costs Jump Twice The Rate Of Inflation, But Web TV's Just Too Much Of A Pain To Stop The Cable Juggernaut

While the internet and television industry ever-so-slowly merge, people continue to flock to traditional cable subscriptions even though prices have risen 77% since 1996, roughly twice the rate of inflation. And despite the fact you're paying more, an average of $60 per month in fact, you're probably only watching 13% of what you pay for. So why has the digital revolution brought down prices of every knick-knack available, but hasn't broken tradtional cable? One reason is that channels are available in bundles thanks to an understanding between cable companies and Hollywood producers, making it tough to subscribe to channels you watch individually. Cable companies justify bundles by saying that revenues shared by Hollywood thanks to bundled channels keep cable prices from rising even more. They also say that better image quality, on-demand services and bundled phone and internet packages mean viewers are getting better value for their dollar relative to inflation.

Another reason is that broadband speeds in many cases are not fast enough yet to stream and download video in a timely manner. This is changing fast though, but one problem still remains. Not a whole lot of us like to sit for hours watching video at our uncomfortable computer chairs. We want to see content on our big screens. Although, tons of companies are coming out with set-top boxes that will stream video from your computer to your TV, many of us just don't want the inconvenience of going online to find content, hooking up a middleman set-top and then streaming it to our TV's. It's easier to just push a remote button, sit back, and relax with a cable subscription.

When it really comes down to it, it looks like cable will be around for a long while. Not because the technology isn't there, but because moving web video to our home theater's is so far, just an inconvenient pain in the ass.

Via New York Times