Cable Company Dinosaurs: They Still Can’t Get It Right

Given the way traditional video services are hemorrhaging customers, one would think they would take steps to try to preserve them, like, perhaps, improving service or trimming charges. One would be wrong.

According to Angie’s List, Internet, phone, and TV services annually rank among the most complained-about categories on the List, citing technical difficulties, poor customer service, and billing or fee issues topping the complaints.

A 2014 study found that more than half of those they surveyed (53%) would quit their cable company if there were a decent alternative. A Huffington Post article reporting on that survey noted that “cable companies routinely rank at the bottom when it comes to customer satisfaction. And then, of course, there’s the ever-increasing bill that you get each month.”

Cases in point: The consumer advocacy group Free Press reported that the cost of Comcast’s basic cable package soared by 68% between 2009 and 2013. DSLReports singles out Charter, which recently acquired Time Warner Cable and Bright House Networks, raising its rates 40% since the acquisitions.

Why are they able to get away with this? Because we the public allow them to.

We fall for their sad tales of how expensive it is to lay or upgrade cable or fiber-optic lines, of how even the most minimal regulations imposed by the government are choking the life out of them, of how competition would ruin them, run them out of business. When they help to install a business-friendly administration in the government, we’re too busy to fight back because we’re tied up trying to explain to the recorded voice on the phone the reason for our call because “all of our customer service representatives are busy assisting other callers.”

Of course, it’s not as if we’ve had a whole lot of options. Again and again Big Cable whined to the federal government and localities about the horrific costs of laying cable (as if they were surprised by the costs of starting up such a business), and then being granted government-sanctioned monopolies in cities and towns across the country. In many if not most cases, we’ve had nowhere else to go.

Well, as the old saying has it, the chickens are finally coming home to roost.

A recent article in DSLReports revealed that TV cord cutting is occurring at the fastest rate on record, adding that the Wall Street research firm Kagan predicts that the cable industry will lose another 10.8 million more subscribers by by 2021. The traditional cable industry will still have 82.3 million subscribers, but this figure represents a 20% reduction from the industry’s peak. By contrast, Kagan expects such streaming options as Dish Network’s Sling TV and Playstation Vue to become “mainstream,” with a total of 11 million users by 2021.

DSLReports estimates that the pay-TV sector lost a record 762,000 subscribers last quarter, more than five times the number for the same quarter last year, with most analysts predicting another record loss this year of more than one million subscribers.

TheWrap attributes the bleeding to “constant price jumps and a reputation for adversarial customer service,” and quotes from a Pew survey last year which found that 64% of Americans said they viewed a TV set as a necessity in 2006, but that the number dropped to 42% in 2010. It seems consumers are learning they can live without the over-priced, under-serviced cable industry.

It noted that AT&T’s “ambitious, over-the-top streaming service [is] directly targeted at cord-cutters who’ve had enough of paying for cable or satellite TV. It’s yet another blow for the increasingly embattled pay-TV industry—but one they might bear some responsibility for accelerating.”

Hale Boggs, chairman of Manatt Digital Media, told TheWrap, “[Streaming] makes companies rethink their pricing models and delivery models. Cable companies are adapting to that. I think that’s healthy for them, their consumers and their competition.”

Although it’s too soon to predict the demise of traditional cable altogether, it might be time for the legacy firms to start rethinking their costs and service models. Meanwhile, be sure to let Billshark help you save on your cable, satellite, and phone bills until that day arrives.