(1/29/2016 note: This price analysis considered only analog cable, which became history 8/2015. That was the only way to meaningfully compare prices over the years since 1975. More recent features as HD, DVR service, extra tiers of channels, phone service, security, etc. add considerably to the cable bill.)
2/1975 – $ 5.95/mo
3/1986 – $10.60/mo
4/1995 – $21.00/mo
3/2008 – $44.00/mo
9/2014 – $68.00/mo
The first four data points I gleaned from published articles. The fifth I took from my current bill:
$68/mo = $71/mo for “TV Starter”, “Expanded Service”, and “Advanced TV Service” minus $3/mo to remove “Advanced TV”.
(FYI: The $68 does not include TV fees, taxes and surcharges of $6.33/mo over and above. Advanced TV is required for HD, and required for DVR service, which costs $12/mo more plus a cable box/DVR at $8.50/mo. Advanced TV also adds the Music Choice channels.)
From 1975 to 2014, that’s an increase of over 1000% (not counting inflation).
It’s hard to compare the years apples-to-apples, even when considering only analog service as I do here.
In 1975, the service was in its infancy. There were 24 channels, a number of which were static text displays.
In 1986, Tulsa Cable offered only “basic” service, channels 2-37, less at least 4 pay channels. But the basic channels were, as a group, much higher quality than 1975.
The 1995, 2008 and 2014 figures are for “extended basic” analog cable, roughly channels 2-63, less the pay channels.
Let’s consider only 1995-2014, years in which the meaning of “extended basic” remains roughly the same, so that we CAN compare apples-to-apples. You see a 224% increase over that period. That’s a whole lot.
What are some of the mitigating factors from the cable company’s point of view?
Inflation is the obvious one. Using a CPI calculator for 1995-2014, I get a 56% increase over the period. That is, $21 in 1995 is equivalent to $32.77 in 2014. From $32.77 to $68 is a 108% increase over those 20 years, inflation-adjusted.
Other factors would include increasing programming costs, carriage disputes, system upgrades, e.g., digital, HD, fiber optics.
But 108% increase, inflation-adjusted? Wow. That’s an average of almost 4% per year increase on top of inflation. And it is expected to continue. (FCC: Basic Cable Prices Increased At Four Times Rate Of Inflation, Consumerist, 5/19/2014)
We as customers care mainly about the number on that monthly bill.
Seeing it almost double every decade (and that’s not even considering bundled phone, internet, and security) will eventually bring out the cord-cutter in everyone.
The value of cable/satellite service is relative to the free broadcasting available to you in any given year.
In 1975, that consisted of 4 analog channels. In 2014, the number of subchannels over the air approaches 30 (many of them HD), not even including all the full-time religious and shopping channels.
I found that we spend well over 90% of our viewing time on the major networks, subchannels (such as MeTV), and pay streaming services Netflix and Amazon.
Is it worth paying a minimum of $68/mo (analog-only, which very few customers do) for those channels that cable offers above and beyond broadcast TV?
- Are you addicted to channel surfing?
- Can you handle a less user-friendly system than the more integrated cable/satellite solutions?
- Do you have the wherewithal to put up an antenna and hook up a Tivo or other DVR system?
- Can you stand not participating in day-after water cooler conversations about “Breaking Bad”?
- Do you have the time and energy to change over to broadcast/streaming?
- If not, do you have the money to spare?
(Later note: we found that by answering the third question “yes”, the TiVo Roamio mitigated the first two questions.)
Only you can answer these questions. They’re not easy for most people. But if the curve continues to bend upwards, as is likely, there will be increasing economic pressure to seriously consider them.
I’m reminded again of a line from the 60s movie I mentioned previously, “Let’s Kill Uncle“:
(Uncle to nephew) “You’re a charming child, Barnaby, but five million dollars charming, you are not!”