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The Great Migration From Cable To Satellite TV
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By Van Whitsett
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What you are about to read should not come as a shock to you,especially if you are a subscriber of cable TV.
Comcast Corp, the dominant cable provider in the nation, hasraised cable TV rates for the third time in three years Therates will go up about 6 to 7 percent, depending upon where youlive. Other cable providers, like RCN, have also raised rates byabout 8 percent.
7 percent is double the rate of inflation. Comcast's prices haverisen three times faster than inflation since 2000.
Although cable price increases have moderated in recent yearsfrom the double-digit hikes of the 1990s, many research analystspredict that costs will keep going up.
"Operational costs" are the culprits for the rate hikes."Operational costs" include energy costs, improvements incustomer service and network maintenance. Cable companies havemillions of miles of outdated lines buried below ground, and arein the process of converting their technology to digital, whichwill be expensive. Comcast spent nearly $200 million in the pastyear to maintain and enhance its fiber-optic network in the BayArea alone.
More Facts
Cable rates have climbed 40 percent in the past six years, froman average $34.40 in 2000 to the $47.93 just announced for 2006.During that same period, inflation increased 14.3 percent,according to the federal Bureau of Labor Statistics.
Is it any wonder why the sale of satellite tv is increasing?
There are about 65 million homes nationwide with cable TV, anumber expected to decline to 61 million by 2008. DirecTVaccounts for 15 million subscribers and EchoStar's Dish Networkfor 12 million.
Because satellite providers don't have to pay taxes levied bylocal governments and feature smaller infrastructures, consumersget more bang for the buck with satellite.
With cable, additional charges are typically assessed forinstallation and equipment. These charges range from $30 to $80.Satellite Tv offers free instulation, free movie channels, andfree upgrades, usually as an incentive to get customers to signup for their services.
More pros of a satellite dish.
* Digital picture means better quality * More flexibleprogramming options * Cost is cheaper per channel * Goodsolution for those living in rural areas
According to a J.D. Power study, the average cost of satelliteservice is about 4% less than cable. Satellite subscribers savean average of about $2.00 monthly compared to cable.
So, as the rates for the cable companies continue to rise, youcan expect comsumers to continue the migration to satellite tv.
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