Is cord cutting the new solution?

by HN Porter of tech4today.com

After years of putting off cord cutting as neither a threat or issue , cable TV and satellite providers are now faced with the consequences of the now fast-growing trend. Cable TV is now declining in high numbers with major cable TV providers losing up to 1.1 million subscribers combined.

With this, the most obvious solution would be to offer cable TV at lower prices with lower benefits, however as cord-cutting grows, customers who stick with cable and satellite are getting billed higher. As a result, most people are opting to cut the cord not as a choice but as necessity.
For example, last quarter Charter Spectrum lost 36,000 residential pay-TV subscribers, yet the company’s cable TV revenues increased by 3.4 percent. In the quarter before that, Charter lost 66,000 subscribers, but still squeezed out a 2.9-percent increase in cable TV revenues. According to Charter “annual rate adjustments” and “promotional roll-off” helped explain the revenue growth. In other words, people who previously signed up for cheap promo rates are now paying a lot more, and customers across the board are getting hit with price hikes. In November, Charter raised Spectrum’s “Broadcast TV” surcharge from $9 to $10 per month, increased cable box fees from $7 to $7.50 per month, hiked digital adapter fees from $5 to $6 per month, and reduced the discount for bundling TV with internet by $5 per month. Charter plans to tack another $2 per month onto its “Broadcast TV” fee in March, bringing the surcharge price to $12 per month. Spectrum’s advertised pricing doesn’t reflect most of those rate increases.
However Charter Spectrum is not the only cable TV provider to increase their prices as this year, Comcast will be raising its regional sports fee by an average $1.50 per month, and its broadcast TV fee by $2 per month, Bloomberg reports, while DirecTV and Dish are both raising prices by $3 per month or more for all packages. DirecTV is also pulling back on the discounts it once offered to new subscribers as roughly two million customers reach the end of their two-year contracts, The Wall Street Journal reports, because there’s little point in offering unprofitable promo deals if those customers end up leaving.

SOURCE: TECHHIVE