US Cable TV Prices to Rise

01 December 2004

Like death and taxes, cable TV price hikes are unavoidable facts of life for US viewers.

Despite increasingly fierce competition from satellite TV operators, the cable companies are insisting on issuing bigger bills next year.

And the rises are running ahead of inflation, which stands at 3.2%. The nation's largest cable operator, Comcast, is about to increase prices by 5.9% for its standard seventy-channel analogue package, while Time Warner's increase is 4.1%.

Only Cox Communications and Cablevision Systems have kept their rises lower, at 2.5% and 2.1% respectively.

These upward moves come as satellite companies are gaining momentum and, more importantly, customers. Kaggan Research reports that satellite operators EchoStar and Rupert Murdoch-controlled DirecTV between them added a net 2.3 million subscribers last year, while cable operators suffered a net subscriber loss of 63,000.

However, Comcast and fellow cable companies can draw comfort from their 73.7m customer base and the fact their satellite rivals are also raising prices - in the case of DirecTV by up to 9%.

The cable operators may be more expensive overall, but they claim to provide a better service via features such as video-on-demand and high-speed internet connections.

Prices rises for these digital services are being kept low, at least for now, in the hope more customers will upgrade.

Data sourced from Wall Street Journal Online; additional content by WARC staff