The annual convention of the National Cable and Telecommunications Association occurs this week. Normally at the convention, the industry pats itself on the back; but this year, there’s plenty for the NCTA’s members to be worried about – not least, the attitude of their customers.
As mentioned by the Los Angeles Times, the number of households subscribing to cable and satellite is slowly but steadily going down. In 2009, 87% of households had some form of pay-TV. This year, it’s 84%; and media firms predict it will dip even lower in coming years.
This is due in large part to the outrageous cost of pay-TV, given what customers actually get for their money. Because cable only sells channels in “bundles,” every viewer – even those who don’t care about sports – is forced to fund ESPN and its fellow networks, which are the most expensive channels on pay-TV. Similarly, families with children must pay for channels like Spike, while those without must pay for Disney. The entertainment industry likes to boast that subscribers get more channels now than ever; in 2007, a customer with an expanded basic package got 120 channels, while today, they get 180. But that’s hardly a selling point to end users, who now find themselves paying for even MORE channels they never watch and don’t want.
And the price of such packages just keeps going up. A package that cost $70 only four years ago now costs $83, and could hit $100 a month in just a few years. As a result, during the recent recession, some families eliminated their subscription altogether. And more and more technology-adept young adults are moving to watching their favorite programs exclusively online, via Netflix, Hulu, iTunes or other sources.
Combine all these headaches with Senator McCain’s proposed Television Consumer Freedom Act, and it’s no wonder many entertainment industry bosses aren’t looking forward to this year’s party.