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Aug 15

Cutting the cord … are we paying too much for TV?

Every month I get a bill from DirecTV. Actually, I get an email telling me that they charged my credit card for the monthly service. And every month I look at the bill and ask myself why am I paying over $100 per month to watch TV.

When I was a kid, you put up an antenna on your roof or used “rabbit ears” on top of your TV and you got television.

Rabbit Ears

It was that simple. Even today, with my antenna I can pick up about 50 or 60 channels between the 2 television markets that service our area. So, again, I ask the question… why am I paying over $100 per month for TV?

The answer is pretty simple. Because of cable and other non over the air (OTA) TV services, we’ve been conditioned to having all these channels that you can’t get OTA… TNT, USA, History, Bravo, HGTV, Food Network, and a host of others. And, if I were to cut the cord, I’d lose programming that we’ve come to enjoy.

television-network-logos

I’ve specifically not mentioned the channels like HBO, Showtime, Starz, Cinemax and the other “premium” channels. You actually have a choice there. My choice has been to use them (HBO, so I can watch Newsroom) and then “turn off” the channel when the series ends. That way I only pay that $18 per month (plus taxes) for the time that the show is airing.

I think the price issue falls into three categories — providers, packages and technology. Different providers oftentimes offer different channels. Dish, Comcast, Time Warner, DirecTV and Uverse all have different offerings. Some offer channels that others don’t. Some offer channels in HD that are only available in standard definition on other providers. So if there’s specific channel you want, you may not be able to use the “least expensive” provider.

Next, packages…. for the most part, the basic basic package doesn’t give you a lot. You have some basic cable channels, and that’s about it. So many people opt for the second level package (which usually runs a lot more than the basic package). But then there’s the one or two channels you really want that aren’t available in that package so you bump up another level — a bump that might cost you as much as $15 per month. Add another 20% or so for taxes and that goes up to $18 per month. And it can go even higher from there!

Before you know it, that package that was advertised at $29.95 per month is now up to over $60. And that doesn’t include any specialty or sports packages or even the technology to deliver the shows to your house.

A friend of mine recently wrote on his blog about how DirecTV wasn’t going to have the PAC12 again this year… why… well read it. You’ll see one of the reasons why these package prices are so high. You can find it here… http://is.gd/xGGbF0.  You can see that negotiations like this ultimately drive up the cost of TV services.

Now, lets talk about the technology side of the bill. Providers like DirecTV, Dish, UVerse, Comcast add on fees for just about everything… $6-$10 for receiver lease or “mirroring” fees. Some of the cable companies charge $18 for their DVRs. Others charge you an amount when you sign up for a “reduced” monthly lease fee.  It’s all over the board, depending on the provider.

Then there’s the typical $10 HD charge. Heck, can you even buy a non-HD television any more? Makes no difference – you need to pay the fee. Want to use that DVR you’re leasing? That’ll be another $3-$5, please. Want to be able to view those recordings all over the house. More $$$ please. Up front lease fees, installation fees, early termination fees, late fees (ok – that’s legitimate), you name it there’s probably a fee for it. To paraphrase the old saying — a fee here, a fee there — pretty soon you’re talking real money.

So that’s some of the reasons why it costs so much to get TV service into your home.  Each month I get frustrated and I swear that I’m going to cut back — and then I realize that if I go out for a casual dinner, that usually winds up costing between $40 and $50 for the two of us (including the tip). $100 for the entertainment value isn’t quite as bad as I think it is when I get that bill.

Next post, I’ll talk a little about some of the ways you can get a lot of the programming and possibly drop your monthly cost a little.

So that’s it for now — Hope you enjoyed, and be sure to leave any comments you have and share this on your Facebook wall or via e-mail to your friends!

2 comments

  1. Stuart Sweet

    Marty, excellent article as always and I appreciate the link to my blog! I think that the important thing to realize is the concept of choice. You do have a choice – you can watch the dozens of channels of free HDTV out there with an antenna, or if you see the value of sports programming and higher-quality scripted fare, there’s cable and satellite.

    You make an excellent point that these teaser rates offered by cable companies aren’t worth a whole lot. Sadly, our society has become so accustomed to teaser rates and line-item fees that a provider that chose to offer an “all-in-one” price probably wouldn’t get a lot of traction since most folks would just assume a 30% bump over that from line-item fees.

    Keep up the good work!

  2. Marty Silbernik

    Thanks for great feedback Stuart. You mentioned the teaser rates. When I was thinking about switching providers not too long ago, I tried to get the people on the phone to tell me what my monthly bill would be after all the promotional rates and freebies.

    I always tell people to try to get what that cost would be. My old be surprised at how many people are shocked after that initial honeymoon rate expires,

    Not one CSR was able to tell me what the cost would be. And why would they want to? It would really discourage people from switching if they really knew.

    Thanks again for a great post on the PAC 12. I was just what I needed to help make some of my points.

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