Editor’s note: A previous version of this story had the average person watching 17 channels. However, according to new data provided by MediaPost’s Research Intelligencer, the average person now only watches about 15 channels. That means cable TV subscribers now pay over $7 a month per channel they watch.
Complaints about the rising cost of cable TV have been commonplace for years. And as cable prices continue to skyrocket, now exceeding $105 per month on average, it’s easy to see why folks are getting fed up.
As prices rise, cable TV providers are adding more and more channels to their bundles. For some, this helps to even out the rising cost – but for most, those extra channels are never even viewed. Subscribers, it seems, are not getting a fair bargain.
Hiding Behind the Bundle
Cable providers love to offer massive channel bundles, often exceeding 150-200+ channels. This makes it easier to justify charging so much for coverage.
After all, if you’re paying $100/mo for 150 channels, that’s less than $0.70 per channel per month – not bad!
Where the math gets more sinister is when you start to look at the number of channels that people actually watch.
Based on yearly reports from Nielsen, a leading market research and data provider, and new data provided to us by MediaPost’s Research Intelligencer, the average cable plan now includes nearly 200 channels but the average household watches only 15 channels – less than 10% of the channels covered! These numbers have actually dropped over years, despite the rapid growth of channels available to watch.
Meanwhile, data from Leichtman Research Group shows that the average cable bill was $106 in 2017 – and growing rapidly.
Currently, the average American cable subscriber watches just 15 TV channels
Cold, Hard Math
Crunching the numbers, the value proposition of cable isn’t looking so great.
At an average cable TV rate of $106 per month, and an average viewing of just 15 channels per household, the average American pays more than $7 per month, per channel watched. Ouch.
In some cases, the math is likely even worse. For instance, many people keep cable strictly to watch live sports on a handful of channels, while watching everything else online. In those situations, it’s possible some are paying $10, $15 or even more per channel per month.
Only Getting Worse
Paying $7.07 per channel watched is certainly not great – but data shows that it’s only going to get worse.
Cable TV prices are rising at a rate of 5.8% per year, according to data from the FCC. Meanwhile, let’s assume the average number of channels actually watched by each household stays steady at just 15.
If these trends continue, in just 10 years the average American will pay $176 per month for cable TV, or $11.73 per channel they watch.
And in fact, the average number of TV channels watched could actually continue to go down, thanks to the rise of streaming services like Netflix and Hulu. More people are subscribing to these on-demand streaming platforms while keeping cable TV, just to be able to watch a few specific channels.
10 years from now, the average American cable subscriber will pay more than $11 per month per channel they actually watch.
Fuel for the Flames
Many cable subscribers are fed up. The continued increases in rates, along with a steady increase in commercials per hour of TV is causing more people to rethink their cable subscriptions.
Meanwhile, customers are fleeing cable TV in droves, with more than 3 million Americans ditching cable in 2017 alone. Their #1 complaint? The rising cost of cable TV.
Ironically, cable giants’ response to subscriber losses so far has been to raise prices even further, attempting to make up for the lost revenue. But punishing loyal subscribers is unlikely to be a winning long-term strategy.
Finally, it seems cable providers may be starting to see the writing on the wall concerning the future of TV. Comcast, Disney, and others are pouring huge amounts of money into streaming services like Hulu, while Disney is working on its own streaming service to rival Netflix.
AT&T, Comcast, Disney, YouTube, Dish Network, CBS, and just about every other media giant now seems to have their own streaming service, promising lower prices and no commitment.
For the time being, the increased competition is a boon for customers. The future of TV, it seems, is changing.