Raising prices while customers bail on your product is usually a surefire way to drive even more people away from what you have to offer. In the U.S., the average cable/satellite TV bill has gone from a little more than $73/month to more than $103/month, with no real improvements to be seen during that time.
Rates are rising so quickly mainly to keep up with lost revenue from cord cutters – those who only subscribe to streaming services such as Netflix, Hulu, Amazon Prime, HBO Now, etc. Overall profits are slightly down for cable companies in the last 5 years, which have been leaning on an older demographic to keep paying their cable/satellite bill without attempting to cut the cord.
According to the study done by Leichtman Research, about 82% of households subscribe to a cable/satellite service, down from 87% in 2011.
What may be one of the most interesting findings though is the fact that 25% of those who have moved in the last year do not subscribe to pay-TV services. Since Millennials are the group most likely to move residences frequently, this means that cable has a serious problem on their hands in the coming years with a crowd that does not want what they have to offer.
Up until now, the saving grace for cable/satellite providers has been the ability to offer live sports more conveniently than streaming services. This is starting to change with services such as MLB.tv and NHL.tv being offered, with the NFL and NBA likely to offer their own online streams for U.S. viewers after their current broadcast deals expire.
Cable TV providers will still be around for at least the next decade thanks to high speed internet and associated products. Satellite providers may have a tougher time competing in the rapidly shrinking traditional TV market in the coming years, especially with notoriously slow internet speeds and few additional features.