It's been a rough quarter for cable companies – and a rough year, and a rough decade. So, given the laws of supply and demand, you might expect that cable prices have been dropping as customers turn away. But, incredibly, the opposite is true: according to Leichtman Research's annual study, pay TV prices have actually risen by 40% in 5 years!
The average pay TV subscriber paid $73.63 for cable or satellite back in 2011. But that same subscriber now faces a much steeper bill: $103.10, according to the latest edition of the study.
Source: Leichtman Research Group
Customers are responding to these rising prices. Of all households with a television, the report says, 82% subscribe to a pay TV service – which, President and Principal Analyst Bruce Leichtman points out, is well below where things were 5 years ago and is similar to the penetration level pay TV had more than a decade ago. Cable numbers are stagnant at best, while the OTT space continues to grow.
Here's an idea: maybe pay TV companies should lower the prices to meet demand!