They say that the only things in life that are certain are death and taxes.
But if you’re one of the tens of millions of people in the US who pay for TV, you could add one more to that list: your cable or satellite bill will continue to go up, year after year.
A chart from the US Bureau of Labour Statistics has been making the rounds this week because it shows just how much the cost of TV has gone up relative to other products and services.
While the price indexes of PCs, TVs, software, audio equipment, and internet services have all gone down, the price index for cable and satellite television and radio service have shot up.
Between December 1997 and August 2015, TVs, PCs, software, audio equipment, and more, have decreased in price.
But over that same period of time, cable and satellite service has gotten more expensive.
Cable and satellite TV service has increased faster than food, housing, and energy, part of the the “all items” category represented by the salmon-dashed line in the chart.
There are three main reasons why TV service keeps getting more and more expensive.
1. Lack of competition.
We’re all familiar with how little choice we have when it comes to who we pay for TV. The luckiest people in the US may live somewhere where they can choose between a cable operator, a phone company, and a satellite TV operator. But others may live in places only served by one cable company, and because they live in an apartment building, or live somewhere without a view of the southern sky, they can’t get satellite service.
Competition drives down prices. Little or no competition can lead to higher prices.
Between 1995 and 2013, the average price of an expanded basic cable package has increased by 6.1% each year, according to the FCC.
2. Networks are charging more for programming.
Brett Sappington, the director of research at Parks Associates, a Dallas-based market research and consulting firm, told Tech Insider that the primary reason prices keep going up is that the prices companies like Comcast and DirecTV have to pay the networks for content keep going up.
“The cable networks and broadcasters ask for more money, and that really puts a crunch on the pay TV providers,” Sappington said. “At the same time, costs have increased for cable networks and broadcasters to create the content.”
3. The bundle is too big.
If you pay for TV, it’s likely that you have several hundred channels. But it’s also likely that you don’t watch most of them.
TV providers keep increasing the number of channels people get in a bundle. Sometimes negotiations between cable operators and networks include stipulations that the provider must take certain smaller and less-popular channels if they want the popular one.
According to Nielsen, in 2013 the average home in the US received 189 channels in 2013, up from just 129 in 2008.
But providers have to pay the networks for these channels, and they pass those costs to you by increasing the price of your subscription.
“You have this symbiotic, almost cartel-like relationship between the distributors and the networks,” Daniel Ernst, a a senior analyst at Welch Capital Partners, told Tech Insider. “This creates a mutually beneficial cycle — add more channels, collect higher fees, and repeat.”
This makes it seem like you have a lot of choice, but in reality, you don’t have that much choice — because you have to pay for the channels whether you watch them or note.
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