Cable TV Price Increases Have Beaten Inflation Every Single Year For 20 Years (businessinsider.com) 112
An anonymous reader quotes a report from Business Insider: The pay TV industry is losing customers, but prices continue to climb. In fact, for U.S. cable TV in particular, price increases have outpaced inflation for every single one of the past 20 years, according to a recent FCC report surfaced by CordCutting.com. Every one! In 1995, cable cost $22.35 per month, on average. In 2015, it was $69.03. Now, it does makes sense for prices to go up for goods like cable as long as there is inflation. But cable's increases are more than double that of inflation. On average, cable prices went up 5.8% yearly for the past 20 years. Inflation clocked in at 2.2% per year, on average. Though there has been grumbling about the high prices of cable for quite some time, it has lately taken on a more serious air. That's because there is evidence that the pay-TV industry is experiencing a hiccup -- or the start of a long-term decline. The pay-TV industry lost 800,000 subscribers last quarter, according to the research firm SNL Kagan. "About 82% of households that use a TV currently subscribe to a pay-TV service," Bruce Leichtman of Leichtman Research said in a statement last month. "This is down from where it was five years ago, and similar to the penetration level eleven years ago."
Duh (Score:5, Interesting)
>"Cable TV Price Increases Have Beaten Inflation Every Single Year For 20 Years"
I don't think any of us needed a study to tell us this. Although my Interenet speed has gotten better, and I now have HDTV channels, the *quality* of the content and the selection of quality channels has NOT improved. If anything, it has gotten worse and worse.
This is unsustainable and why you are seeing people jump ship with other options just as soon as they could, and most of those options are only available due to Internet streaming (which is consuming TONS and TONS of bandwidth and increasing exponentially).
Cable monopolies are far too used to being the only game in town and raking in tons of cash doing so. They need to start offering lower-priced a-la-cart channel options and soon or their slide will continue. But don't think for a moment they will just suffer alone. Since they are still monopolies for Internet in most regions, they will start to try and make up for their lost profits by raising the prices of their Internet services. It is already happening.
If people keep paying... (Score:2)
then the customers must think it's worth the expense. As for me, I'm just running on a borrowed internet connection. Cable TV or internet is too expensive in my view.
But then, I don't watch sports, so I'm not held hostage by a need to watch ESPN.
Re:If people keep paying... (Score:5, Insightful)
They don't necessarily think it is worth the expense, in some cases they simply have no choice. Where I live, I have no other choice for [real] Internet access, period. So it doesn't matter what they charge, I pretty much "have" to pay it. Not everyone has the option (or desire) to "borrow" (more like "steal"?) Internet access like you can do. In fact, most don't.
TV is somewhat less important [to most people, including me], but if you want quality content that is NOT on Netflix/whatever or over the air, again, you are stuck (think History Channel, Science Channel, NatGeo).
About sports- that is a perfect example of one of the several causes TV is too expensive. I call it the "sports tax." Like you (and many others), I don't give a F*** about *any* sports. And, yet, a sizable amount of my cable bill dollars go directly to ESPN's pockets for their exorbitant licensing fees. And the cable TV companies act like it is a wonderful thing for everyone that we have access to 26 sports channels, and the golf channel, and 20 home shopping network channels, and 30 reality-tv-junk channels, and 18 non-English channels, and etc.
Last time I complained to Cox about their latest series of price hikes, they had the nerve to tell me how wonderful a value their service is because it covers all the people in my house at no extra charge! I told them "Yeah, because, since I live alone, I guess should be terribly happy I am subsidizing it for all those multi-person households; such a great deal for me."
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They don't necessarily think it is worth the expense
If they are voluntarily paying it, they do.
in some cases they simply have no choice.
Gun to their head and all that?
If you think its over-priced, then don't pay for it. So long as you continue to pay for it, it cannot actually be over-priced in your view unless there is that gun to your head.
We have laws against putting guns to peoples heads. Perhaps you should call the police.
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They are grumpy old idiot box addicts, they have a gun in their heads, keeping the drooling and watching and drooling and watching and drooling and watching. They will keep paying extra until they buck the kicket and for many that is not too far in the future. Pay TV like the majority of it viewers doomed bwa ha ha.
Re:If people keep paying... (Score:4, Insightful)
>" If they are voluntarily paying it, they do."
>" Gun to their head and all that?"
OK, let's see how your logic works for:
1) Electricity
2) Gas
3) City water
4) City Sewer
They don't have a "gun to your head" to pay for those, so it must be voluntary, right? I mean, you CAN live without any of those.... burn candles and wood, get bottled water, crap in a pail. Some services are necessary for reasonable modern living, and Internet is becoming one of those.
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The things he listed are of actual great intrinsic value. Cable television isnt of great intrinsic value, at all.
Cable television is fucking entertainment.
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>"Cable television isnt of great intrinsic value, at all."
Where in my posting did I say ANYTHING about cable TV? I said Internet.
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Access to Internet is becoming a necessity in the modern world. There are many services these days that are only available through an Internet connection. i.e. Unemployment claims (in my state), many job applications, Social Security account access (although I read they were backtracking on that recently), and it is a requirement from my kids' school system.
TV service, maybe not so much. I dropped cable
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Slightly OT, but amusing. My 82 y/o mother says she doesn't need the internet. Then she asks me to order something for her online. :) I also set up an email for her so she could get a price reduction from someplace. Even someone with no computer uses the internet! :)
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He said internet, but aside from that- since when does entertainment have no intrinsic value? Although a point can be made post-Seinfeld.....
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I've noticed that it's almost impossible to do banking without an internet connection any more, at least for basic accounts. Many energy companies in the UK offer discounts if you have an online only account too. It's as essential as a phone these days.
By the way, try not having a landline. It's surprising how many companies can't comprehend that you only have a mobile. Well, I do have a landline, there just isn't a phone connected to it.
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they kind of do, actually - not having all of those can get your house condemned, in some places. Huntsville, for example... [thehomestead.guru]
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I don't like paying for clothes, yet I find I am forced to, even if they don't have a gun to my head.
What did people that think like you do before there were clothing stores?
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> but if you want quality content that is NOT on Netflix/whatever or over the air, again, you are stuck (think History Channel, Science Channel, NatGeo).
Download eMule and check out tvunderground.org.ru.
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Check out Sling TV [sling.com] from DishNetwork. It's a streaming only service that starts at $20/month, with no contract. I get every channel I want except Discovery. HBO is $15/month extra. None of the annoying shopping/infomercial type channels.
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The older I get, the more content I'm interested in on TV is available over the air. The subchannels are full of old 1970s and 1980s reruns right now- and some 1960s and 1950s reruns.
I'm amazed how well Johnny Carson's Tonight Show jokes about the 1984 Presidential Race translate to the 2016 Presidential race.
Re:If people keep paying... (Score:5, Insightful)
I'm just running on a borrowed internet connection.
How does that work? Do you return the bandwidth when you're done using it?
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If I had mod points +1 insightful. :)
I recall a similar "look at it from this angle" long ago when I worked in Cable TV.
I was in the owners office when a friend of his came in and asked him if he could have free service at his house. "Why should I do that?" my boss asked.
He replied, "Because I'm your friend."
Boss replied, "If I am your friend, why don't you pay me double?"
In those days 50% of gross went to cash flow. I suspect it isn't that juicy today.
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But how much of that is inertia? Lots of people kept landlines long after they primarily switched to using a cellphone because that's what you did, you had a phone at home. I'm sure lots of people are the same way with cable. You have a TV? You get cable. That's how everyone did it for ages and if you want local TV it's what you do and a lot of younger people are not that comfortable about the idea of messing with an antenna.
Break the monopolies! (Score:1)
Intertia - you nailed it! The Cable companies plan was to get more and more set top boxes, and package programming so that you need to get the gold or you wont get some channels you want, Up Up Up goes the bill !! The triple play is DEAD.. Lets be clear.. VOIP is a joke of a service. Get OOmah and switch to double play. then switch more and more to Interweb based TV content, and then you only need the interweb. Problem is that the cable companies have a monopoly lock on so many communities. Verizon was su
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"Cable TV Price Increases Have Beaten Inflation Every Single Year For 20 Years"
I don't think any of us needed a study to tell us this.
I did. I think Comcast is paying me $10/month to hold onto one of their cable boxes and list my name as a TV subscriber for a year. Haven't even taken it out of the shipping box. I know the list price of the TV is some positive number, and I'm sure that's the one the FCC claims has been rising 6%/year, but that's not what I'm paying. I've got a $60/month internet connection that I only pay $50 for, and TV is free.
At the end of the year, I send the box back. Two months later, Comcast calls up and offers
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Comcast always wants to increase my cost when I add TV. And they always get personal, "you don't have a TV? What do you do for fun?" me, "read books." or, "what is your favorite show?" me, "[any netflix original]." My favorite was the guy who, after we established that i didn't own a TV and refused to buy one still tried to sell me cable, "just in case."
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No, what's surprising is the person above getting $10/month discount to have TV.
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Bundling in cable is a little weird, yeah. At McDonald's, the meal deals are cheaper than buying all the parts, but still more expensive than all but one.
As I understand it, while they have to pay for the high-demand channels (ESPN), they get paid to carry the low demand stuff, and presumably each customer who is nominally getting cable TV results in a little more money for them, for no extra infrastructure.
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They need to work without set-up (under?) boxes.
I don't want cable for free, the extra clutter of wires (wall -> box -> TV for video, Wall -> for power) is not worth it (with my chrome-cast I essentially have one power cord for my TV and no others).
Sell me an IP service with more than 4 back episodes on demand, and I may be game (though, probably not for $60, I know plenty of sports fans that would in an instant).
Canada (Score:2)
This has been an even more magnified issue in Canada. The CRTC which is the group in charge of regulating the industry has tried in the last year or so to curtil the companies by basically saying that they must A) offer a basic package that costs 25$ and B) have a-la-carte options available.
So of course the first thing that both (because there is really only 2 in Canada, Bell and Rogers) companies did was obey the letter of the law whilst totally destroying the spirit. So the both offer a 25$ package. Howev
What are they thinking?!? (Score:5, Funny)
/sarcasm
It SHOULD surpass the rate of inflation. (Score:1)
When the cost of luxuries increases faster than inflation, it is actually a sign of improvement. No one needs cable tv; they pay because they enjoy it and have money to spare. If consumers are willing to bear a higher cost for a luxury, it shows that they are doing better economically.
What about internet? (Score:5, Insightful)
Also given the number of alternatives (online games, video games in general and tons and tons of streaming) there should be _downward_ pressure. That's not a sign of a healthy economy. That's a sign of a monopoly without any regulation.
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Unless, of course it's that they can no longer afford to go out, so they settle for cable.
Of course there's a lot of cable cutting going on as well.
To be somewhat fair... (Score:3)
shocker (Score:5, Interesting)
Prices have gone up and the quality of the programming has gotten worse (which I didn't think was possible). The only thing keeping them in business at this point is that in many markets the cable companies are the only source of broadband internet. I would kick Comcast to the curb tomorrow if there was a broadband alternative in my town. The INSTANT there is one, I'm gone.
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Check your local city/town council. Ours has "deals" with the cable company put in place that prevents Verizon from coming into our city. The deals were to get the cable company to lay wires, even though they would have done so anyways. A 500k population city will get cable without these deals yet our council did them. We still got it later than other cities next to us and they have Verizon option. Call it political madness.
Lobby your state to change laws. (Score:5, Interesting)
Pass laws that force cable companies to sell internet separate at capped pricing where they can not punish you for not getting cable packages.
recently moved to florida from the midwest and I get 4X the bandwidth for 1/2 the price and they cant charge me extra for not getting cable tv. a cheap antenna gets me about 18 channels if I really think I need to watch some stupid live sports event. or live news.
$39 a month for 100mbps/10mbps Comcast was raping me at $70 for 15Mbps/1.5mbps in Michigan
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Hard to believe, but cable used to be AD-FREE (Score:4, Insightful)
Re:Hard to believe, but cable used to be AD-FREE (Score:5, Insightful)
That was the whole point of paying for TV. No ads! And, boy, was it worth it. Now you've got the worst of both worlds, you pay out of pocket AND they crush you with commercials.
Frankly, the reason TV is being taken over by Netflix et al. has everything to do with getting rid of ads.
Hardly. Cable (aka CATV or community antenna television) started when people couldn't get good reception at their homes with Yagi (technically Yagi-Uda).
Because the market for original CATV was limited to folks that couldn't receive over the air and due to lots of regulations which prevented most out-of-area transmission (aka superstations), the CATV concept was pretty much saturated until non-broadcast providers came on board (like HBO which charged a premium but also drove basic cable subscriptions). Cable never meant no-advert TV. Your subscription paid for the cable infrastructure. The premium channels always cost more (even if you pirated them, you had to pay for your pirating equipment).
FWIW the advert model works great with a unfragmented audience (most people watch the same channels), but unfortunately as the programming becomes more fragmented, the infrastructure to broadcast all possible channels to your house and you pick the one you want to watch becomes less efficient and the revenue from untargetted adverts (e.g., the historical network broadcast and cable model) becomes less tenable and the extra subscription uni-cast on-demand model becomes relatively more cost effective. This is the real dynamic you are seeing today. As bandwidth becomes cheaper and cheaper, eventually is more efficient to just bill you instead of billing the advertisers and everything will become unbundled.
The downsides of this eventuality are that that high-bandwidth cable that serves most of America is likely to be come quite expensive as the cable companies collapse. In America, if you can't get high-speed internet today, you are likely doomed by this coming reality as the capital incentives to lay new commodity connections (w/o any premium service) is going to be pretty minimal (as Google Fiber has no doubt discovered and retreated from playing this game).
Re: Hard to believe, but cable used to be AD-FREE (Score:2)
Re:Hard to believe, but cable used to be AD-FREE (Score:4, Insightful)
Considering CATV's origins it's surprising that next month we are considering dropping cable at work because we have 20+ tvs on display and not a single clear QAM channel. Suddenlink won't supply us with a single in the clear digital channel at any price but with a decent HDTV antenna we can run all 20+ tvs with a HD picture for the one time cost of the antenna.
Fuzzy cable with 48 channels or HD digital with 4? Your picture quality impacts sales and all the tv's will be tuned to the same channel 99% of the time. What'dya think they're going to choose?
The cycle repeats (Score:4, Interesting)
Frankly, the reason TV is being taken over by Netflix et al. has everything to do with getting rid of ads.
True but they have to make it attractive to get people to take the plunge and switch. Wait another few years until Netflix starts to reach subscriber saturation and their revenues are no longer increasing due to growth. Then they will then try to start adding in the ads to increase their revenue and/or have over the rate of inflation price increases until the next technology comes along to make them obsolete and the cycle can begin again.
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The next technology? Like Bittorrent?
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"That was the whole point of paying for TV. No ads!"
Baloney. "Cable" started off as CATV- "Community Access Television", Co-ops in the late Forties. Find a high point, stick some antennas on it, and distribute the signals below, where often terrain blocks reception. Every time this subject pops up, some moron like you makes that preposterous claim, and always with absolutely no evidence. In any event, what tech existed back then that could remove the Ads and replace them... with just what, exactly? The orig
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While I don't like ads, I don't know if they're THE reason for Netflix.
In my own personal life, I'd rank the reasons as follows.
1. Can watch content any time (not on a schedule)
2. unique content itself (shows, comedy specials...)
3. Suggestions
4. No Ads
I still get cable due to a bundle deal, and watch a few shows. The commercials don't really bother me. Heck, there's always a few that entertain me and its a good excuse for a break.
I'd rather not have commercials of course, but they're a small inconvenience.
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While I don't like ads, I don't know if they're THE reason for Netflix.
In my own personal life, I'd rank the reasons as follows.
1. Can watch content any time (not on a schedule)
2. unique content itself (shows, comedy specials...)
3. Suggestions
4. No Ads
I still get cable due to a bundle deal, and watch a few shows. The commercials don't really bother me. Heck, there's always a few that entertain me and its a good excuse for a break.
I'd rather not have commercials of course, but they're a small inconvenience.
Your #1 is also mine, but I can get that from any 2-bit DVR. The no ads is a biggie. For every decent ad, there are 9 crappy ones, and some are too bad to stand even for the 2 seconds it takes to grab my remote and FF past the SOBs.
Thank you Captain Obvious (Score:5, Insightful)
Re:Thank you Captain Obvious (Score:4, Insightful)
So what you're saying is, 25% of forced paid content is actually good? Wow, you are being really generous.
Re:Thank you Captain Obvious (Score:5, Insightful)
So basically we're paying 2x more for cable than 20 years ago, and getting 7x more content. Or in other words, the price per channel is less than 30% what it was 20 years ago. (Of course as you say, a lot of those channels are junk. So what we're paying per quality channel is debatable.)
Nonsense (Score:2)
Inflation measured accurately, not heuristically, is way higher than 2-3%. See shadowstats.com
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Not mention "inflation" is a weighted average - not all prices inflate at the same rate. (Both NASA and the DoD, for example, maintain their own inflation models because of this.)
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Ah, yes, ShadowStats, which mixes reasonable criticisms of BLS methodology with massaged conclusions that are widely improbable and don't comport with reality in front of you. It asserts that U.S. GDP has been declining 2-4% every year since 2000 regardless of increasing industrial production and rail transport and electrical production, it asserts that you are actually paying 3x more for groceries than what your receipts shows, and that actual consumer goods inflation is 10% or more every year (doubling t
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Sounds like you're using the Keynesian redefinition of inflation. Inflation "the increase of the money supply", not "higher prices".
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Two comments:
1. ShadowStats has its alternative M3 money supply growth running at about 3-4% right now. That's not "way higher" that BLS's measurement of CPI-based inflation. Source: http://www.shadowstats.com/alt... [shadowstats.com]
2. Sounds like you're from the Austrian school. Question: If the "way higher" increased money supply doesn't seem to have an impact on the prices of goods and services, then what is your concern? That inflation has unnaturally been bottled up by the Fed and is predicted, for the nth ye
Inflation numbers or real costs? (Score:2)
Hardware upgrades are really, really expensive in the USA for some reason but have to be hidden.
That would point to inflation numbers been kept low or huge hidden expert staff costs in the US.
Are staff and contractors enjoying top expert pay over the years? Legal teams to keep the networks safe per state are expensive?
Generational shareholders like profit, yachts, jets and see local consumers
Sports! (Score:5, Informative)
(I don't live in the US but have seen prices go up as well)
Our HOA runs owns the cable in the ground for distributing cable TV and I am managing the contracts, technical aspects etc with the cable companies. This enables us to get a better deal for all who wants cable than what people get from their listed prices. The explanation we hear every time the prices go up, are because of the channels that have sports programming included that are responsible for the price hikes. These channels have a few popular TV shows, mixed in with very expensive soccer matches.
So it is sports that costs the most, even when you leave out dedicated sports channels.
More and more people are switching from the full package to the medium package or the small package(where people really should consider just getting those channels over the air). And people are also dropping the extra channels that you pay for individually.
Personally I haven't had cable TV for 4 years(iirc) because I don't have any interest i sports and so cable tv with all the commercials are not really worth it for me.
Re:Sports! (Score:4, Informative)
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Monopoly Rent Seeking (Score:5, Informative)
In economics and in public-choice theory, rent-seeking involves seeking to increase one's share of existing wealth without creating new wealth. Rent-seeking results in reduced economic efficiency through poor allocation of resources, reduced actual wealth creation, lost government revenue, increased income inequality,[1] and (potentially) national decline.
Attempts at capture of regulatory agencies to gain a coercive monopoly can result in advantages for the rent seeker in the market while imposing disadvantages on (incorrupt) competitors. The idea was originated by Gordon Tullock and the term was coined by Anne Krueger.[2]
https://en.wikipedia.org/wiki/... [wikipedia.org]
Not just good ideas, they're the laws of economics
Cable tv price (Score:2)
With the programing available, $1 a month should cover it...
Really gone up (Score:1)
I remember when cable first started and they promised that the price would never go above $6.95/month.
hold on. (Score:4, Interesting)
More like the army of accountants need paid.
Pull the plug (Score:4, Interesting)
I haven't paid for TV in over a decade. I do pay for FTTH, I could get tv for "only" another $20 - no.
Pound sand, Netflix will crush you all.
Eventually the packets will get delegated a utility; the tremendous markup from content funds the inefficient monster that are the tier-1 broadband providers.
Governments should own the infrastructure (fibers on poles). Companies should provide the service. That's the long term fix.
It might not even matter if LTE gets fast and dense enough.. Will kids care?
Lots of other stuff too.. (Score:5, Insightful)
Housing, schooling, medical. It may not have gone up each year but averaged over any length of time their numbers are significant. Which makes one question the fundamental weighting of the inflation indexes.
My own personal inflation indexes are probably 3x what the published one is. Particularly if one breaks out the "wants" vs "needs". In the US its basically impossible to be a nomad or farm public/common land. So, I need a house, I need gas to drive to work, and I need to eat something that isn't McDonalds. If it weren't for the fact that I'm now one of the "privileged computer engineers" I would be living paycheck to paycheck unable to afford a new dishwasher when the old one broke. The particularly damming thing, is that because of this basic cost of labor/etc many things in the US have become so expensive that hiring someone to fix a car/reroof a house/etc can easily cost days of my inflated pay rates. (A new root installed by 4 guys on my house in two days can cost more than 2 months of net salary). Retail rents in front the wamart in the not so great part of town can easily exceed $15 a square foot.
There are people getting insanely rich from all this, its just none of us actually working for a living.
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In specific, only you can answer these questions. However, there are some common general trends:
don't subscribe but (Score:3)
subscribers, only you can kill cable.
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It was more for me to get Comcast with cable.
We just cut cable except (Score:3)
Who Cares? Minimum Wage (Score:2)
More importantly, inflation has beat the minimum wage every year for some twenty-five years running. Then people complain that we "can't" raise the minimum wage because it would harm businesses. Well, fuck 'em sideways if they can't pay a living wage. Fuck them right in their fucking ears. They obviously aren't important.
Ambiguity, much? (Score:2)
... "About 82% of households that use a TV currently subscribe to a pay-TV service," Bruce Leichtman of Leichtman Research said...
That statement could use some clarification; I consider myself to be a cord-cutter, with an internet-only broadband connection, (no landline and no "cable" TV subscription, premium channels or otherwise) but it would be easy to argue that I should be included in this statistic, because I subscribe to both Hulu and Netflix. Which is it? Am I really a cord-cutter, or am I simply subscribing to the next generation of "premium" services?
Who are we blaming here? (Score:2)
Is it the just content distributors (cable and satellite) fault or is it the fault of the content creators? Or both? Is it a 50/50 split? Or is one party more at fault?
In the last 5-10 years look at the number of local TV stations that changed their status from "must carry" to "retransmission consent".
Does the practice of bundling channels contribute to the growing cost? Would it be cheaper to have a la carte?
How does the cost of infrastructure upgrades and repairs affect this?
There are so many reasons
Never leave money on the table !! (Score:2)
Geez - I decided to read the article including the FCC document.
Expanded Cable (level of service referenced in the blogs) has increased as described. The number of Channels delivered in the service has also increased from 44 to 181 - yet price per channel has decreased from $0.60 to $0.45.
What I didn't notice was whether the 2015 prices included HDTV? I know I pay extra to get HD (even though the world is HD - but I digress) - and I can't think of any "boost" to prices back in 1993. Set-top boxes rent
Don't believe government stats (Score:2)
The government wants you to believe that inflation is low but how is it that every monthly expense I have has gone up (with the exception of natural gas) every year for the past decade and in some case e.g. health insurance, has outpaced inflation by significant double digits? Take the red pill, folks. They are blowing smoke up your collective ass.
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That's one of my gripes. The price of luxury items seems to be stable or even going down. But the necessities are going way up. Cable TV isn't really a necessity, but I do pay for it every month, so its increases hurt a lot more than a cheap laptop, which I only buy once in 5+ years, helps.
Isn't Slashdot a site for smart people? (Score:2)
You are paying for your local channels (Score:2)
What a lot of people don't realize is that, when you pay your monthly cable/satellite bill, a portion of your money goes to your local stations. Same goes for the non-prime cable channels. This is why, every so often, we see these fire-and-brimstone things saying things like "you are about to lose X channel...". Usually what happens is the cable/satellite companies raise their prices, and the station/channel owners see that as an opportunity to hit them up for more money. If the cable/satellite company does
Coincidence (Score:2)
Wow, every year for 20 years? What a coincidence, I stopped buying cable TV 18 years ago.
I haven't missed it although I heard The Wire was a good show.
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