With network fees dramatically increasing and impacting your monthly cable TV bill, we wanted to give you a backstage pass to better understand the economics of the TV business. Your monthly bill has two big cost buckets: programming costs and service costs.
What are programming costs?
All satellite and cable providers (TV providers) pay each network owner (programmer) a fee for every household that receives a particular network – regardless of whether anyone in the household actually watches it.
- These network fees have increased dramatically at 3 1/2 times the rate of inflation over the last 15 years.
- Five media companies control 90 percent of the networks, and while we work hard to keep these costs under control, they continue to use their power to demand more money.
- Programmers are securing long-term contracts that contain significant fee increases, regardless of how many people watch.
What are service costs?
This includes installation costs, along with maintaining and upgrading our network infrastructure. The bulk of this portion is used to build a better Internet and entertainment experience. Alliance currently absorbs the majority of these costs and doesn’t pass them onto customers.
Why does your lineup include channels you never watch?
Many customers would prefer to pay for only the most popular networks and a select group of quality, special interest ones that appeal to them. This is something many satellite and cable TV providers want to offer, but most networks prohibit this in their contracts. Unfortunately, programmers have the upper hand in how we package their networks.
How does this happen?
It’s a matter of power: Just five multi-billion-dollar corporations own or control about 90 percent of existing TV networks.
Comcast, Walt Disney, 21st Century Fox, CBS/Viacom and Time Warner own most of the networks you want, as well as many of those you don’t. And they won’t let you have the most-popular networks unless you get the less-popular ones, too. It’s simple economics: They need more viewers for these less-popular networks to increase their subscriber fees and their advertising fees – so they can make more money.
The average household watches only 16 channels regularly. But when programmers package all of their networks together, they create bloated channel lineups and expensive monthly cable TV bills.
Our goal is to manage your monthly bill by fighting against excessive network fee increases from large, powerful media conglomerates. That’s why we are a member of the National Cable Television Cooperative, a collective of more than 900 independent cable TV and broadband providers across the United States. This allows us to negotiate as one larger group to gain the cost benefits, while still enabling us to provide quality service to our customers.
Due to escalating programming fees, Consolidated Telcom doesn’t earn excess revenue on cable TV. But because we’re a cooperative that’s owned by our customers, our No. 1 goal is to provide customers with the services they want.
As long as there is a demand for cable TV, we’ll remain committed to providing you with a quality product at the best price possible.